Which statement is true?A) At high levels of disposable income,induced consumption is zero.B) At low levels of disposable income,induced consumption will be greater than autonomous consumption.C) Autonomous consumption will generally equal induced consumption.D) None of these statements is true.

Question

Daniel Valencia · Accepted Answer

Final Answer : D, Explanation :  Each statement provided is incorrect. At high levels of disposable income, induced consumption does not become zero; it typically increases as income increases. Induced consumption can be greater than autonomous consumption at various income levels, but it's not specifically tied to low levels of disposable income in the way described. Autonomous consumption and induced consumption are distinct concepts, where autonomous consumption occurs regardless of income level, and induced consumption varies with income, so they do not generally equal each other.

Definitions

Learning Objectives

Learning Objectives

Related questions