Macroeconomic aggregates: What items are included in “national expenditure”? Identify the components summed to obtain total (national) expenditure for the economy.
General Knowledge
Indian Economy
Difficulty: Easy
Choose an option
-
AOnly private consumption expenditure
-
BConsumer expenditure and government expenditure only (no investment)
-
CConsumer expenditure, investment (capital formation), and government expenditure (plus net exports in an open economy)
-
DOnly exports of goods and services
Answer
Correct Answer: Consumer expenditure, investment (capital formation), and government expenditure (plus net exports in an open economy)
Explanation
IdentityIn expenditure terms, aggregate demand/expenditure is C + I + G + (X − M). In a closed-economy statement, it comprises consumer expenditure, investment, and government expenditure.
Final AnswerConsumer expenditure, investment (capital formation), and government expenditure (plus net exports in an open economy)