The four components of aggregate planned expenditure are
A) the real interest rate, consumption expenditure, investment and government expenditures on goods and services.
B) the real interest rate, disposable income, wealth, and expected future income.
C) consumption expenditure, investment, government expenditures on goods and services, and net exports.
D) consumption expenditure, investment, government expenditures on goods and services, and wealth.

Question

Quizplus · Accepted Answer

Aggregate planned expenditure is the sum of consumption expenditure, investment, government expenditures on goods and services, and net exports. Option A is incorrect because the real interest rate is a determinant of investment, not a component of aggregate planned expenditure. Option B is incorrect because disposable income, wealth, and expected future income are determinants of consumption expenditure, not components of aggregate planned expenditure. Option D is incorrect because wealth is not a component of aggregate planned expenditure, but a determinant of consumption expenditure.

The Four Components of Aggregate Planned Expenditure Are