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Autonomous consumption

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Updated: Aug 20, 2021

That part of consumption which does not depend on current income.

Autonomous consumption

a > 0 because even those with no income need to consume to live, and can finance expenditure by running down assets or borrowing. The level of a is influenced by total assets held, expectations of future income or acquisitions of assets through legacies, and social conventions about minimal acceptable standards of living.

Reference: Oxford Press Dictonary of Economics, 5th edt.


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