Given the consumption function C = R100 billion + 0.75 (R300 billion), autonomous consumption is equal to:

Question

R100 billion

R225 billion

R300 billion

R325 billion

Answer 1

In the consumption function given, \( C = R100 \text{ billion} + 0.75 (R300 \text{ billion}) \), the autonomous consumption refers to the part of consumption that does not depend on the income level, which is represented by the constant term in the function.

In this case, the autonomous consumption is:

R100 billion

So, the correct answer is:

R100 billion.