Question

In \( Y = \overline{C} + I + G + c (Y - I) \), which of the following is an autonomous term?

• A. \( \overline{C} \)
• B. \( I \)
• C. \( G \)
• D. All of these

Hint:

Autonomous terms are those that are independent of the income level or output in the economy.

Answer 1

The Correct Option is D

Step 1: Understanding autonomous terms.
In the given equation, autonomous terms are those that do not depend on the income (Y) or other variables. These are fixed and determined independently of the level of income. In the equation, \( \overline{C} \), \( I \), and \( G \) are all autonomous terms because they do not change with changes in \( Y \) (income).

Step 2: Analyzing the options.
(A) \( \overline{C} \): This is an autonomous term as it represents consumption that does not depend on income.
(B) \( I \): Investment is autonomous and does not depend on income in this equation.
(C) \( G \): Government spending is also autonomous as it does not change with income.
(D) All of these: Correct. All of \( \overline{C} \), \( I \), and \( G \) are autonomous terms.

Step 3: Conclusion.
The correct answer is (D) All of these, as all these terms are autonomous in the given equation.