what is an autonomous expenditure 
an autonomous expenditure describes 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 the classical economic theory states that any rise in autonomous expenditures will create at least an equivalent rise in aggregate output such as gdp if not a greater increase understanding autonomous expenditurean autonomous expenditure obligation must be met regardless of income it is considered independent in nature as the need does not vary with incomes often these expenses are associated with the ability to maintain a state of autonomy autonomy in regard to nations includes the ability to be self governing for individuals it refers to the ability to function within a certain level of societally acceptable independence to be considered an autonomous expenditure the spending must generally be deemed necessary to maintain a base level of function or in an individual sense survival often these expenses do not vary regardless of personal disposable income or national income autonomous expenditure is tied to autonomous consumption including all of the financial obligations required to maintain a basic standard of living all expenses beyond these are considered part of induced consumption which is affected by changes in disposable income in cases in which personal income is insufficient autonomous expenses still must be paid these needs can be met through the use of personal savings consumer borrowing mechanisms such as loans and credit cards or various social services autonomous expenditures and income levelswhile the obligations that qualify as autonomous expenditures do not vary the amount of income directed toward them can for example in an individual sense the need for food qualifies as an autonomous expenditure though the need can be fulfilled in a variety of manners ranging from the use of food stamps to eating every meal at a five star restaurant even though income level may affect how the need is met the need itself does not change governments and autonomous expendituresthe vast majority of government spending qualifies as autonomous expenditures this is due to the fact that the spending often relates strongly to the efficient running of a nation making some of the expenditures required in order to maintain minimum standards factors affecting autonomous expenditurestechnically autonomous expenditures are not affected by external factors in reality however several factors can affect autonomous expenditures for example interest rates have a significant effect on consumption in an economy high interest rates can tamp down on consumption while low interest rates can spur it in turn this affects spending within an economy trade policies between countries can also affect autonomous expenditures made by their citizens if a producer of cheap goods imposes duties on exports then it would have the effect of making finished products for outside geographies more expensive governments can also impose controls on an individual s autonomous expenditures through taxes if a basic household good is taxed and no substitutes are available then the autonomous expenditure pertaining to it may decrease examples of autonomous expendituresome of the spending classes that are considered independent of income levels which can be counted as either individual income or taxation income are government expenditures investments exports and basic living expenses such as food and shelter 