Total consumption consists entirely of two components: autonomous consumption and income-dependent consumption.
Autonomous consumption is independent of income,while the rest of consumption is strongly correlated to the level of income.

Question

Quizplus · Accepted Answer

This statement is true. Autonomous consumption refers to the level of consumption that is not influenced by changes in income, whereas income-dependent consumption is directly influenced by changes in income.

Total Consumption Consists Entirely of Two Components: Autonomous Consumption and Income-Dependent