ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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private household consumption expenditure
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household investment expenditure
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govt. expenditure + private consumption expenditure
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household expend+ private investment expend +govt expend + net exports
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Detailed explanation-1: -For open economy aggregate demand is equal to Consumption + Investment + Government expenditure.
Detailed explanation-2: -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.
Detailed explanation-3: -Hence, an open economy is said to be one that trades with other countries in commodities and services and often also in financial assets. Indians, for example, can utilize goods which are manufactured around the world and some of the goods from India are exported to other nations.
Detailed explanation-4: -An open market is characterized by the absence of tariffs, taxes, licensing requirements, subsidies, unionization, and any other regulations or practices that interfere with free-market activity. Open markets may have competitive barriers to entry, but never any regulatory barriers to entry.