Please explain relationship between autonomous consumption and dissavings?
What is the implication of increase/decrease in MPC and MPs on investment multiplier?
Dear Student,
Autonomous consumption and dissavings are two different things. Autonomous consumption is the level of consumption which will occur even if there is zero level of income.
Dissavings is equal to income minus consumption.
When there is increase in MPC there is decrease in investment multiplier. And there is increase in MPS there will be increase in the investment multiplier.
Regards,
Autonomous consumption and dissavings are two different things. Autonomous consumption is the level of consumption which will occur even if there is zero level of income.
Dissavings is equal to income minus consumption.
When there is increase in MPC there is decrease in investment multiplier. And there is increase in MPS there will be increase in the investment multiplier.
Regards,