Aggregate expenditure is made up of the following four components:
A)healthcare, infrastructure spending, defense spending, and social security spending.
B)consumption, investment, government expenditure, and net exports.
C)stocks, bonds, mutual funds, and certificates of deposit.
D)consumption, investment, government expenditure, and taxation.

Question

Quizplus · Accepted Answer

Aggregate expenditure is a measure of the total spending in an economy, which is made up of four components: consumption (spending on goods and services by households), investment (spending on capital goods by firms), government expenditure (spending by the government on goods and services), and net exports (exports minus imports). Therefore, choice (B) is the correct answer. Choice (A) is incorrect because it only includes government spending categories and excludes private spending. Choice (C) is incorrect because it includes financial assets rather than spending categories. Choice (D) is incorrect because it excludes net exports.

Aggregate Expenditure Is Made Up of the Following Four Components