Autonomous Expenditure

Sure, here’s what “autonomous expenditure” means:

Autonomous expenditure refers to spending on goods and services that are not closely tied to a firm’s production activities. Examples include spending on consumer goods such as durable goods, non-durable goods, and services.

In other words: It is spending on items that are not directly related to the firm’s production process, but are still spent in the course of business operations. This spending is not influenced by changes in the firm’s production schedule.

Here are some examples of autonomous expenditure:

• Purchase of office supplies for administrative purposes
• Rent on office space
• Purchase of machinery for general use in the firm, not directly used in production
• Purchase of computers and software for business use
• Advertising and marketing expenses
• Interest on loans

Autonomous expenditures are used to calculate the firm’s aggregate demand and are important for understanding the overall health of the economy.