For an economy, aggregate demand equals:
A) consumption plus investment plus government spending plus exports.
B) consumption plus investment plus government spending plus (exports minus imports).
C) consumption plus investment plus (taxes minus transfers) plus (exports minus imports).
D) consumption plus investment plus government spending plus net exports (imports minus exports).

Question

Quizplus · Accepted Answer

Aggregate demand in an economy is the total demand for goods and services within that economy. It is calculated as the sum of consumption (C), investment (I), government spending (G), and net exports (exports minus imports, X-M). Therefore, the correct formula is C + I + G + (X - M).

For an Economy, Aggregate Demand Equals