If investment falls to zero, national income does not fall to zero because of _________________.

Autonomous Consumption

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Induced investment

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Autonomous investment

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Multiplier

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Solution

The correct option is B Autonomous Consumption
1. Autonomous consumption refers to that consumption which occurs when there is no income in the economy. It is the minimum level of consumption that takes place in the economy.

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Similar questions

In an economy income increases by 10,000 as a result of a rise in investment expenditure by 1,000. Calculate

(i) Investment multiplier.

(ii) Marginal propensity to consume.

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