Macro

Income & Employment

Easy

In the consumption function $C = \bar{C} + cY$ ; autonomous consumption denoted by:

$C$

$cY$

$\bar{C}$

$Y$

$C$

$cY$

$\bar{C}$

$Y$

✅ Correct Option: 3

Option 1 -> C represents total consumption, not autonomous consumption.

Option 2 -> cY represents induced consumption (consumption dependent on income).

Option 3 -> C̄ represents autonomous consumption (consumption independent of income).

Option 4 -> Y represents income, not autonomous consumption.

Hence, Option 3: C̄ -> Autonomous consumption (C̄) is the level of consumption that occurs even when income (Y) is zero. It represents the minimum consumption expenditure required for basic necessities, which is independent of the current income level. In the consumption function C = C̄ + cY, C̄ is a constant term that shifts the entire consumption function vertically, while cY represents the income-dependent portion of consumption. -> correct

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(B) The Great Depression.

(D) Publishing of 'General Theory of Employment, Interest and Money'.

Choose the correct answer from the options given below:

In the consumption function C=Cˉ+cYC = \bar{C} + cYC=Cˉ+cY; autonomous consumption denoted by: CCC cYcYcY Cˉ\bar{C}Cˉ YYY

Solution

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CUET Economics Past Year Questions (Topic-Wise)

In the consumption function $C = \bar{C} + cY$ ; autonomous consumption denoted by:

$C$

$cY$

$\bar{C}$

$Y$