Question

One way to derive aggregate demand is by looking at its four component parts, which are

A. consumer expenditures, planned investment spending, government spending, and net exports.
B. consumer expenditures, actual investment spending, government spending, and net exports.
C. consumer expenditures, planned investment spending, government spending, and gross exports.
D. consumer expenditures, planned investment spending, government spending, and taxes.

Answer 1

Answer: The correct answer is "A. consumer expenditures, planned investment spending, government spending, and net exports.".

Explanation: Aggregate demand is the sum of goods and services that consumers, businesses and the State are determined to buy at a certain price level. So The total demand for domestic production consists of the sum of the following four components: Consumption, Investment, government spending and net exports.