Question

What is autonomous consumption?

Answer 1

Autonomous consumption is the consumption expenditure that occurs when income levels are zero. Such consumption is considered autonomous of income only when expenditure on these consumables does not vary with changes in income; generally, it may be required to fund necessities and debt obligations.

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Answer 2

Explanation:

Autonomous consumption is defined as expenditure occurring when the rate of disposable income is zero. Such spending is usually used to fund consumer needs, but it encourages customers to loan and withdraw money from savings accounts.

The equation to calculate the consumption is a C = A+MD.

In other words, where C is the consumer expenditure,  A is the autonomous production applied to M which is the marginal consumption propensity and D is the real disposable income.