Aggregate expenditure is the sum of
A) all types of spending by households and firms
B) spending and savings by households
C) spending by households and governments on final goods and services
D) spending by households,government,firms,and foreigners on final goods and services
E) all spending and saving by households,firms,and governments

Question

Quizplus · Accepted Answer

Aggregate expenditure refers to the total spending on final goods and services within an economy. This includes spending by households, governments, firms, and foreigners. Therefore, option D is the best answer. Option A is incorrect because it only includes spending by households and firms. Option B is incorrect because it suggests that savings are included in aggregate expenditure, which is not the case. Option C is incorrect because it only includes spending by households and governments. Option E is incorrect because it includes savings, which are not part of aggregate expenditure.

Aggregate Expenditure Is the Sum of