Which of the following should be subtracted while calculating aggregate demand of the U.S.?
A)Pakistan's purchase of F-16s from the U.S.
B)Computers imported by China from the U.S.
C)Memorabilia purchases in the U.S.by a foreign tourist.
D)A U.S.firm's purchase of German machinery.

Question

Quizplus · Accepted Answer

Aggregate demand is calculated as the total demand for goods and services within a country. Imports, such as a U.S. firm's purchase of German machinery, should be subtracted because they represent spending on foreign-produced goods.

Which of the Following Should Be Subtracted While Calculating Aggregate