An increase in autonomous consumption means that
A)the consumption function shifts down.
B)the consumption function shifts up.
C)the consumption function becomes steeper.
D)the consumption function becomes less steep.

Question

Quizplus · Accepted Answer

Autonomous consumption is the level of consumption that occurs even when there is no income, such as the fixed expenses like rent, insurance, and so on. An increase in autonomous consumption will result in an overall increase in the consumption level at each level of income, which means the consumption function shifts up.

An Increase in Autonomous Consumption Means That