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

Question

Quizplus · Accepted Answer

The key idea of the aggregate expenditure model is that the level of GDP (gross domestic product) in any particular year is mainly determined by the level of aggregate expenditure. This model suggests that the total spending in the economy (consumption, investment, government spending, and net exports) determines the level of output and income in the economy.

The Key Idea of the Aggregate Expenditure Model Is That