ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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consumption and investment
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government spending and net exports
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all of the above
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none of the above
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Detailed explanation-1: -Aggregate demand is the sum of four components: consumption, investment, government spending, and net exports.
Detailed explanation-2: -The four components of gross domestic product are personal consumption, business investment, government spending, and net exports. 1 That tells you what a country is good at producing. GDP is the country’s total economic output for each year.
Detailed explanation-3: -The five components of aggregate demand are consumer spending, business spending, government spending, and exports minus imports. The aggregate demand formula is AD = C + I + G + (X-M).
Detailed explanation-4: -GDP represents the total amount of goods and services produced in an economy while aggregate demand is the demand or desire for those goods. Aggregate demand and GDP commonly increase or decrease together. Aggregate demand equals GDP only in the long run after adjusting for the price level.
Detailed explanation-5: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.