The aggregate demand for home input can be written as a function of:
I.Real exchange rate.
II.Government spending.
III.Disposable income.
A) I only
B) III only
C) I and III
D) II and III
E) I, II, and III

Question

Quizplus · Accepted Answer

The aggregate demand for home input is influenced by the real exchange rate, government spending, and disposable income. The real exchange rate affects the competitiveness of home goods versus foreign goods, government spending directly influences aggregate demand, and disposable income affects consumer spending.

The Aggregate Demand for Home Input Can Be Written as a Function