# Simple Keynesian model of income determination

When determining equilibrium, we take consumption equal to C= ¢ + c' y where ¢ is the autonomous consumption or minimum consumption that would take place even in absence of income. What could be the consequences on equilibrium income if the autonomous consumption ¢ was negative?

• I suppose we talk about Aggregate Demand/Supply Equilibrium. In this case, $AD=C+I+G+NX$. If the economy is closed we just remove $NX$ from the formula. The autonomous consumption is just the constant term of $C$. If the constant decreases, then $AD$ shifts to the left (just look it mathematically since everything is linear). – Commissar Vasili Karlovic Jan 29 '17 at 0:26
• If your economy is closed, the aggregate borrowing cannot exceed savings in first place. However, if your economy is open and you borrow to consume, then $MPC$ and/or $Y_d$ will increase, not autonomous consumption. Check en.wikipedia.org/wiki/Autonomous_consumption – Commissar Vasili Karlovic Jan 29 '17 at 0:36