Aggregate expenditure is made up of the following four components:
A)healthcare, infrastructure spending, defense spending, and social security spending.
B)consumption, investment, government expenditure, and net exports.
C)stocks, bonds, mutual funds, and certificates of deposit.
D)consumption, investment, government expenditure, and taxation.

Question

Quizplus · Accepted Answer

Aggregate expenditure refers to the total amount of spending in an economy, and it is made up of consumption (spending by households), investment (spending by businesses), government expenditure (spending by the government), and net exports (the difference between exports and imports). Thus, option B correctly identifies the four components that make up aggregate expenditure. Option A mentions specific areas of government expenditure, while option D includes taxation as a component, which is not a part of aggregate expenditure. Option C lists different types of financial assets and is not related to aggregate expenditure.

Aggregate Expenditure Is Made Up of the Following Four Components