Explain and diagrammatically represent the shift in the DLF curve as a result of each of the following:
-- a rise in autonomous investment
-- a rise in the size of the budget deficit
-- a decline in autonomous investment
25. What is autonomous investment?
25.Autonom investment is that investment which is independent of
the level of income or profit. Thus, it is not induced by any
changes in the income. The investments which are made with the aim
of introducing new techniques, new inventions etc. or enhance the
level of effective demand during the period of depression and
unemployment are kept in the category of autonomous
Autonomous investment includes introduction of new technique of production, depression or recession, development of new resources,growth of population.Autonomous investment is not determined by consideration of profit. Instead, it is determined by consideration of the social welfare. In the times of economic depressions, the governments try to boost the autonomous investment.
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