ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -C = A + MD where C is the consumer spending, A is autonomous consumption (spending regardless of income levels), M is the marginal propensity to consume (the amount of additional income needed to spend on goods and services rather than saving it), and D is the amount of real disposable income required.

Detailed explanation-2: -Autonomous consumption refers to expenses a consumer must pay for regardless of income. This includes necessities like housing and food, which are considered needs, not wants. If a person has zero income, they may need to borrow money or tap into their savings to pay for these necessities.

Detailed explanation-3: -consumption function, in economics, the relationship between consumer spending and the various factors determining it. At the household or family level, these factors may include income, wealth, expectations about the level and riskiness of future income or wealth, interest rates, age, education, and family size.

Detailed explanation-4: -Autonomous consumption refers to that consumption which occurs when there is no income in the economy. It is the minimum level of consumption that takes place in the economy which is the basic necessity of life.

Detailed explanation-5: -C= c+ bY where c=autonomous consumption, b= marginal propensity to consume, and Y= income. Was this answer helpful?