Explain the concept of autonomous consumption
Autonomous consumption is consumption that is not based on income. Such consumption is based on factors like real wealth, interest rates, household debt, future expectations, and tastes & preferences.
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If devaluation does not improve the BOT, but only the BOP, this implies that
A) the capital account is in deficit. B) the current account is in surplus. C) the improvement comes in the capital account. D) Both B and C.
A shoe factory has an elasticity of supply of .5 as the price of shoes rises from $50 to $75. If the factory produced 100,000 shoes at a market price of $50, how many will be produced at the new price?
(A) 125,000 (B) 400,000 (C) 200,000 (D) 75,000
The greatest advantage of a corporation is
A) ease of setting up the business. B) the double taxation of dividends. C) separation of ownership and control of the business. D) limited liability.
A decrease in the required reserve ratio will:
A. decrease commercial bank loans and reduce the money supply. B. increase commercial bank loans and reduce the money supply. C. increase commercial bank loans and increase the money supply. D. decrease commercial bank loans and increase the money supply.