Which of the following terms is used for the expression ‘C ̅’ in the consumption function?

Correct option is B

The correct answer is (b).
Explanation: ‘C ̅’ in the consumption function refers to autonomous consumption, which is the level of consumption that occurs regardless of income. It represents the consumption expenditure when income is zero.

Incorrect Options Explanations:

· Average propensity to consume: It refers to the ratio of total consumption to total income.
· Marginal propensity to consume: It is the change in consumption resulting from a change in income.
· Induced consumption: This is the part of consumption that changes as income changes.

Information Booster:
· Autonomous Consumption:
· Refers to consumption that occurs even when income is zero.
· It represents basic consumption needs or necessities.