Induced investment refers to the part of a company’s spending on equipment, buildings, and machinery that changes based
Tag: aggregate demand
autonomous investment
Autonomous investment refers to the amount of investment that happens regardless of a country’s income level. It is
investment function
The investment function describes the relationship between planned investment expenditure and factors like national income and the interest
induced savings
Induced savings refers to the part of total savings that changes directly when national income changes. It represents
autonomous savings
Autonomous savings is the amount of money saved that does not change when national income changes. It represents
savings function
The savings function describes the relationship between total household saving and the level of national income. It illustrates
induced consumption
Induced consumption refers to the part of total spending that changes when national income changes. In simple terms,
autonomous consumption
Autonomous consumption is the minimum amount of spending that households must make regardless of how much money they
consumption function
The consumption function (also known as the consumption schedule) describes the relationship between total spending on goods and
income approach (to national income)
The income approach is a way to calculate a nation’s national income by adding up all the money