When the government sector is included in the income-expenditure model, the equation for aggregate income is

Name: When the government sector is included in the income-expenditure model, the equation for aggregate income is
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When the government sector is included, its expenditures (G) are added to the equation, resulting in Y = C + I + G. This is because government spending is also considered a part of total expenditures in the economy, and thus contributes to aggregate income.

When the Government Sector Is Included in the Income-Expenditure Model