Aggregate Consumption Function Scenario. The aggregate consumption function is given by the following equation: C = 1,000 + 0.75YD where C stands for consumption and YD stands for disposable income. Suppose disposable income increases by $100, this means aggregate consumption will increase by and autonomous consumption .

The disposable income increases by $100, this means aggregate consumption will increase by $75 and autonomous consumption remains at $1000.    

Step-by-step explanation:

We are given the following in the question:

where C is the consumption and YD is the disposable income.

If the disposable income increases by $100, then we can write

Thus, the aggregate consumption will increase by $75.

Autonomous consumption is the consumption when customer makes no disposable income.

Thus, we put YD = 0

Thus, the autonomous consumption is $1000.

The disposable income increases by $100, this means aggregate consumption will increase by $75 and autonomous consumption remains at $1000.