The amount of autonomous consumption in an economy is measured by the:
A) the intercept of the consumption function when disposable income is positive.
B) the intercept of the consumption function where actual consumption is above the 45-degree line.
C) the intercept of the consumption function when disposable income is zero.
D) the intercept of the consumption function where actual consumption is below the 45-degree line.
E) the intercept of the consumption function when disposable income is negative.

Question

Quizplus · Accepted Answer

Autonomous consumption is the amount of consumption that is independent of income. Therefore, it is measured by the intercept of the consumption function when disposable income is zero, as it represents the level of consumption that would occur even if income were zero.

The Amount of Autonomous Consumption in an Economy Is Measured