When the consumption is changed as per the change in income level such consumption is known as: Option 1: Induced consumption Option 2: Autonomous consumption Option 3: Effective consumption Option 4: Total consumption

Answer: Induced consumption. Solution: Consumption that varies with the level of income is called induced consumption. In the consumption function C = C + cY, the component cY depends on income and is induced, while C is autonomous consumption, which occurs even at zero income and does not change with income.

Macro

Income & Employment

Easy

When the consumption is changed as per the change in income level such consumption is known as:

Induced consumption

Autonomous consumption

Effective consumption

Total consumption

✅ Correct Option: 1

Consumption that varies with the level of income is called induced consumption. In the consumption function $C = \bar{C} + cY$ , the component $cY$ depends on income and is induced, while $\bar{C}$ is autonomous consumption, which occurs even at zero income and does not change with income.

2026: 19 May Shift 2

When income rises by Rs.10, then induced consumption will rises by?

2023: 29 May Shift 2

C=40+0.8Y and I =10, then what will be the equilibrium level of income?

2025: 2 June Shift 1

From the given table, identify the level of income, where Average Propensity to Save (APS) becomes zero:

2023: 1 June Shift 1

If MPC and MPS are equal, then the value of multiplier is :

2026: 12 May Shift 1

'Paradox of Thrift' refers to-

2025: 3 June Shift 1

Suppose, following data is presented, for an imaginary economy:

Autonomous Consumption = ₹ 100 crore

Marginal Propensity to Consume = 0.6

Investment = 200 crore.

Identify which of the following is the correct value of national income?

When the consumption is changed as per the change in income level such consumption is known as:

Solution

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