The part of consumption spending that is independent of disposable income is called <u>Autonomous consumption</u>.
- The costs that customers must incur even when they have no extra money are referred to as autonomous consumption. No matter how much money or income a customer has available at any particular moment, some things must be bought.
<h3><u>What does autonomous consumption look like?</u></h3>
- Autonomous consumption occurs when you purchase food so you can feed yourself. Not wants—these are fundamental requirements. You might not have enough money to pay for these things, in which case you can use a credit card or money from your savings to make the purchase.
To Learn more about <u>Autonomous consumption</u>, click the links.
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Answer:
b.$70,000
Explanation:
The net income could be computed by two method
First method is
Net income = Revenue - expenses
= $100,000 - $30,000
= $70,000
And, the second method is
The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
$95,000 = $32,000 + net income - $7,000
So, the net income is $70,000
Answer:
Depreciation Expense for the year 1 is $40,000.
Explanation:
The depreciation expense can be calculated using the double declining balance formula which is as under:
Double declining depreciation expense = Cost / Useful life * 2
By putting the values, we have:
Double declining depreciation expense = $100,000 / 5 years * 2
Double declining depreciation expense = $40,000
The depreciation expense for the first year is $40,000.
