The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by
A)investment spending.
B)export spending.
C)government spending.
D)the level of aggregate expenditure.
E)household savings.

Question

Quizplus · Accepted Answer

The key idea of the aggregate expenditure model is that the level of GDP in any particular year is determined mainly by the level of aggregate expenditure, which includes consumption expenditure, investment expenditure, government expenditure, and net exports. The other options (investment spending, export spending, government spending, and household savings) are components of aggregate expenditure, but not the main determinants of GDP in the model.

The Key Idea of the Aggregate Expenditure Model Is That