Question

Aggregate demand includes a. neither the quantity of goods and services the government, households, nor firms want to buy nor the quantity of goods and services customers abroad want to buy. b. the quantity of goods and services the government, households, firms, and customers abroad want to buy. c. the quantity of goods and services households and firms want to buy, but not the quantity of goods and services the government wants to buy. d. the quantity of goods and service the government wants to buy, but not the quantity of goods and services households, firms, or customers abroad want to buy

Answer 1

Answer:

The correct answer is option b.

Explanation:

Aggregate demand can be calculated as the sum of consumption expenditure, investment expenditure, government expenditure and, net exports.

The consumption expenditure shows the demand for goods and services by households. The investment expenditure represents quantity of goods and services demanded by firms.

The government expenditure represents the demand for goods and services by the government and net exports show the quantity of goods and services demanded by customers from abroad.

So, option b will be the right answer.