Autonomous Expenditure

AAA

DEFINITION of 'Autonomous Expenditure'

A macroeconomic term used to describe the components of an economy's aggregate expenditure that are not impacted by that same economy's real level of income. This type of spending is considered automatic and necessary, whether occurring at the government level or the individual level. Classical economic theory states that a rise in autonomous expenditures will create at least an equivalent rise in aggregate output (such as GDP), if not a greater rise.

INVESTOPEDIA EXPLAINS 'Autonomous Expenditure'

Some of the spending classes that are considered autonomous of income levels (which can counted as either individual income or taxation income) are government expenditures, investments, exports and basic living expenses (such as food and shelter).

RELATED TERMS
  1. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  2. Real Gross Domestic Product (GDP)

    An inflation-adjusted measure that reflects the value of all ...
  3. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  4. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
  5. Autonomous Consumption

    The minimum level of consumption that would still exist even ...
  6. Sharpe Ratio

    A ratio developed by Nobel laureate William F. Sharpe to measure ...
Related Articles
  1. Fundamental Analysis

    How Influential Economists Changed Our History

    Find out how these five groundbreaking thinkers laid our financial foundations.
  2. Options & Futures

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  3. Economics

    The Importance Of Inflation And GDP

    Learn the underlying theories behind these concepts and what they can mean for your portfolio.
  4. Economics

    Cashing In On Macroeconomic Trends

    Learn to identify the things that may impact your investments down the road.
  5. Economics

    Understanding Perpetuity

    Perpetuity means without end. In finance, a perpetuity is a flow of money that will be received on a regular basis without a specified ending date.
  6. Economics

    What is the Income Effect?

    In economics, the income effect is the change in the consumption of goods caused by a change in income, whether income goes up or down.
  7. Fundamental Analysis

    What is a Null Hypothesis?

    In statistics, a null hypothesis is assumed true until proven otherwise.
  8. Economics

    Venezuela Teeters On Edge As Oil Revenues Shrink

    Low oil prices have drastically revised the economic status quo -- dealing a destabilizing blow to oil-exporters like Venezuela due to falling oil revenue.
  9. Taxes

    The Fundamentals of Draghinomics

    European Central Bank President Mario Draghi has introduced a set of reforms aimed at reviving the eurozone economy.
  10. Taxes

    The Fundamentals Of Abenomics

    Abenomics is Japanese Prime Minister Shinzo Abe's aggressive, three-pillared economic policy.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center