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Explain and diagrammatically represent the shift in the DLF curve as a result of each of...

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?

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Answer #1

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 investments.
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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