Any increase in autonomous consumption is associated with:
A) an equivalent increase in autonomous saving.
B) an equivalent decrease in autonomous saving.
C) an equivalent increase in the slope of the saving function.
D) an equivalent decrease in the slope of the consumption function.
E) an equivalent movement along the consumption function.

Question

Quizplus · Accepted Answer

An increase in autonomous consumption means that consumers are spending more regardless of their income level, which typically leads to a decrease in autonomous saving since saving and consumption are inversely related at a given income level. Autonomous saving decreases because more of the income is being consumed rather than saved.

Any Increase in Autonomous Consumption Is Associated With