Question

Which statement correctly explains autonomous investment?

Options

• It rises only when the rate of interest falls

• It changes directly with the level of income

• It is income-inelastic and largely undertaken by the government

• It is always made for short-term profit maximisation

Answer 1

It is income-inelastic and largely undertaken by the government

Explanation:

Autonomous investment does not depend on income, is called income-inelastic, and is mainly done by the government for welfare and infrastructure goals.