Question

In S =  −a + (1 − b) Y, 'a' denotes

Options

• Automatic consumption expenditure

• Annual consumption expenditure

• Autonomous savings

• Consumption expenditure

Answer 1

Autonomous savings

Explanation:

Because 'a' is constant, this saving occurs even when income is nil and is unaffected by income level. As a result, 'a' implies independent savings.