Asked by
hannah leaphart
on Oct 13, 2024
Verified
As disposable income rises
A) induced consumption rises and autonomous consumption stays the same.
B) autonomous consumption rises and induced consumption stays the same.
C) both induced and autonomous consumption rise.
D) both induced and autonomous consumption stay the same.
Induced Consumption
The portion of consumer spending that rises when disposable income rises and falls when disposable income decreases.
Autonomous Consumption
The minimum level of spending that must occur, even if a household has no income.
Disposable Income
The sum households have for expenditures and savings after taxes on income are deducted.
- Contrast autonomous consumption with consumption that is influenced by external forces.
Verified Answer
GN
Learning Objectives
- Contrast autonomous consumption with consumption that is influenced by external forces.