Question

Autonomous consumption is consumption that:


varies directly with disposable income


varies inversely with disposable income


independent of the level of disposable income


is constant at first and then varies with disposable income

Answer 1

Autonomous consumption is consumption that is **independent of the level of disposable income**. It refers to the basic level of consumption that occurs even when disposable income is zero, representing the minimum consumption needs (such as food, shelter, etc.) that individuals require.