In the simplest macroeconomic model,with a closed economy and no government,the aggregate expenditure (AE)function is the sum of
A)saving and desired investment.
B)consumption and disposable income.
C)desired consumption and desired investment.
D)consumption and saving.
E)actual consumption and actual investment.

Question

Quizplus · Accepted Answer

In the simplest macroeconomic model for a closed economy with no government, the aggregate expenditure (AE) function is the sum of desired consumption and desired investment. This is because AE reflects the total amount of spending desired by the economy, which in this context includes only the consumption by households and the investment by businesses, both of which are planned or "desired" levels of spending.

In the Simplest Macroeconomic Model,with a Closed Economy and No