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Question
State the meaning of the following:
Autonomous Consumption
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Solution
Autonomous Consumption Expenditure refers to that portion of consumption expenditure that is independent of the level of the disposable income. That is, irrespective of the level of disposable income, there will be always certain consumption expenditure. At zero level of disposable income, when income is zero, then also there will be some consumption expenditure, as the consumer need to sustain their life. The consumer at a zero level of income finances his/her consumption expenditure by the way of borrowings. This part of consumption expenditure is symbolically denoted by capital `"C" (bar"C").`
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Given the following data, find the missing value of 'Government Final Consumption Expenditure' and 'Mixed Income of Self Employed'.
| S.No. | Particulars | Amount (In ₹ crores) |
| (i) | National Income | 71,000 |
| (ii) | Gross Domestic Capital Formation | 10,000 |
| (iii) | Government Final Consumption Expenditure | ? |
| (iv) | Mixed Income of Self Employed | ? |
| (v) | Net Factor Income from Abroad | 1,000 |
| (vi) | Net Indirect Taxes | 2,000 |
| (vii) | Profits | 1,200 |
| (viii) | Wages & Salaries | 15,000 |
| (ix) | Net Exports | 5,000 |
| (x) | Private Final Consumption Expenditure | 40,000 |
| (xi) | Consumption of Fixed Capital | 3,000 |
| (xii) | Operating Surplus | 30,000 |
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What does \[APS=\frac{S}{Y}\] measure?
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