Answer to Question #108119 in Economics for meraj

Question

if autonomous consumption increases, how will it affect MPC and APC?

Answer 1

With the increasing of autonomous consumption, MPC curve will shift up because with the same level of income the consumption will grow up.

The average propensity to consume can be determined by dividing average household consumption, or spending, by average household income. So, with an increase in the autonomous consumption APC also will grow up.