Aggregate expenditure includes spending on
A)C + I + G.
B)C + I + G - NX.
C)C + I + G + NX.
D)C + I + depreciation - NX.

Question

Quizplus · Accepted Answer

Aggregate expenditure includes spending on consumption (C), investment (I), government spending (G), and net exports (NX), which is exports minus imports. Therefore, the correct formula for aggregate expenditure is C + I + G + NX. Options A and B are incorrect as both leave out the net export component, and option D is incorrect as it includes depreciation which is not an expenditure but rather a reduction in the value of an asset over time.

Aggregate Expenditure Includes Spending on