Autonomous consumption (also exogenous consumption) is consumption expenditure that occurs when income levels are zero. Such consumption is considered autonomous of income only when expenditure on these consumables does not vary with changes in income; generally, it may be required to fund necessities and debt obligations. If income levels are actually zero, this consumption counts as dissaving, because it is financed by borrowing or using up savings. Autonomous consumption contrasts with induced consumption, in that it does not systematically fluctuate with income, whereas induced consumption does. The two are related, for all households, through the consumption function:
Other articles related to "consumption, autonomous consumption":
... In economics, the consumption function is a single mathematical function used to express consumer spending ... is used to calculate the amount of total consumption in an economy ... It is made up of autonomous consumption that is not influenced by current income and induced consumption that is influenced by the economy's income level ...
... and Keynesian economists use the following components Consumption expenditure (C) Consumption refers to the household consumption over a given period of time ... The total household consumption can be divided into two parts, they are Autonomous Consumption and Induced consumption ... Autonomous Consumption refers to the amount of consumption regardless of the amount of income, hence, even if the income is zero, the autonomous consumption ...
Famous quotes containing the words consumption and/or autonomous:
“So it is with books, for the most part: they work no redemption on us. The bookseller might certainly know that his customers are in no respect better for the purchase and consumption of his wares. The volume is dear at a dollar, and after to reading to weariness the lettered backs, we leave the shop with a sigh, and learn, as I did without surprise of a surly bank director, that in bank parlors they estimate all stocks of this kind as rubbish.”
—Ralph Waldo Emerson (18031882)
“Without free, self-respecting, and autonomous citizens there can be no free and independent nations. Without internal peace, that is, peace among citizens and between the citizens and the state, there can be no guarantee of external peace.”
—Václav Havel (b. 1936)