ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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GDP = X + I + C + (Y-Z)
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GDP = C + I + G + (X-M)
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GDP = C + I + X + (G-T)
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GDP = (1/MPS)*G + I + C
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Detailed explanation-1: -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-2: -This is often written as C + I + G + (X-M), where C is personal consumption expenditures, I is investment, G is government purchases of goods and services, X is exports, and M is imports. Together, this is all of Gross Domestic Product, or GDP.
Detailed explanation-3: -Aggregate demand is calculated by adding the amount of consumer spending, government and private investment spending, and the net of imports and exports. It is represented with the following equation: AD = C + I + G + Nx. The components of aggregate demand are as follows: C = consumer spending on goods and services.
Detailed explanation-4: -What Is the Formula for GDP? The formula for GDP is: GDP = C + I + G + (X-M). C is consumer spending, I is business investment, G is government spending, and (X-M) is net exports.
Detailed explanation-5: -Aggregate demand (AD), like GDP(E), refers to the total level of spending in the economy. Consequently, when aggregate demand is measured it is the same as GDP(E).