Question:
Total consumption expenditure by households under Keynesian Economics is a combination of ________ and _____ .
(Choose the correct alternative to fill in the blanks)
Total consumption expenditure by households under Keynesian Economics is a combination of ________ and _____ .
(Choose the correct alternative to fill in the blanks)
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Remember that total consumption in Keynesian theory includes autonomous (income-independent) and induced (income-dependent) components.
Updated On: Jan 13, 2026
- Autonomous Consumption, Autonomous Investments
- Autonomous Investments, Induced Consumption
- Induced Investments, Autonomous Investments
- Autonomous Consumption, Induced Consumption
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The Correct Option is D
Solution and Explanation
Autonomous Consumption: This is the consumption expenditure that does not depend on income levels and occurs even when income is zero (e.g., basic needs).
Induced Consumption: This is the consumption expenditure that changes with variations in income, showing a direct relationship between income and consumption.
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