Question:

Q1. what is multiplier in economics. Q2,what is autonomous consumption in economics Q3. induced consumption?

by  |  earlier

0 LIKES UnLike

this are economics related questions specifically macroeconomics.

 Tags:

   Report

2 ANSWERS


  1. 1 - Multiplier in economics means that initial effect of factor will be multiplied due to some laws in economics, for instance government spending multiplier or money multiplier.

    2 - Autonomous consumption is part of consumption that is fixed at any level of income i.e. it will be unchanged even if GDP is zero - it means for example that people will need something to eat even if they are not producing anything in economy. General formula will look something like this C=Ac+MPC*Yd there C-consumption, Ac-autonomous consumption, MPC marginal propensity to consume, Yd-disposable income.

    3 - Induced consumption is second part of equation: C=Ac+MPC*Yd - so part of "MPC*Yd" is induced consumption which varies with income - such consumption is considered induced by income.


  2. there are about 5 multipliers commonly used in 1st year macro

    auto Con is consumption even if income is zero (it is also the intercept consumption function graph)

    induced is consumption from increased income (GDP)

Question Stats

Latest activity: earlier.
This question has 2 answers.

BECOME A GUIDE

Share your knowledge and help people by answering questions.
Unanswered Questions