Question

Autonomous investment is income __________.

• A. elastic
• B. inelastic
• C. dependent
• D. none of the above

Answer 1

The correct option is B inelastic

Autonomous investment refers to that investment which is independent of the level of income in the economy. It remains constant irrespective of the level of income in the economy. It refers to the type of investment which is not affected by a change in the level of income in the economy. Therefore, autonomous investment is income inelastic as it remains the constant and does not response to the change in the level of income.