Here is a consumption function: C = C₀ + MPC(Y_d).The C₀ term is usually defined as A) autonomous consumption. B) point-zero consumption. C) mandatory consumption. D) propensitory consumption. E) none of the above

Question

Quizplus · Accepted Answer

The C₀ term in the consumption function is usually defined as autonomous consumption, which represents the consumption that is independent of income or the level of disposable income. Therefore, the correct answer is A) autonomous consumption.

Here Is a Consumption Function: C = C0 + MPC(Yd)

Here Is a Consumption Function: C = C₀ + MPC(Y_d)