In the equation Y = C + I + G + NX,
A)Y represents the economy's total expenditure.
B)C represents household expenditures on services and durable goods.
C)all of the variables are always positive numbers.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Y represents the economy's total expenditure, which includes consumption (C), investment (I), government spending (G), and net exports (NX). Option B is incorrect as C only represents household expenditures on services and durable goods, not total household expenditures. Option C is incorrect as net exports (NX) can be negative, indicating that the economy is importing more goods and services than it is exporting.

In the Equation Y = C + I + G