Question

Answer the following questions:

What is autonomous consumption?

Answer 1

Autonomous consumption is the consumption that is independent of income. In other words, expenditure on such consumption is undertaken irrespective of the level of income. It includes consumption of such items as food, clothing, shelter, etc. Such an expenditure cannot fall to zero. This part of consumption expenditure is symbolically denoted by $\overline{C}$. The bar over C represents the constant consumption expenditure. It remains constant irrespective of the level of income.