Asked by
Mozhu Zhang
on Oct 13, 2024Verified
An increase in disposable income will
A) decrease autonomous consumption.
B) increase autonomous consumption.
C) decrease total consumption.
D) increase total consumption.
Autonomous Consumption
The level of consumption that occurs when income is zero, representing the expenditures that consumers must make even when they have no income.
Disposable Income
Refers to the funds that individuals can spend or save after all income taxes are deducted.
Total Consumption
The aggregate amount of goods and services consumed in an economy, including individual and governmental consumption.
- Estimate the outcome of changes in disposable income on complete consumption and the act of saving.
Verified Answer
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Learning Objectives
- Estimate the outcome of changes in disposable income on complete consumption and the act of saving.