Aggregate demand is the total demand for all goods and services in an economy from ?
Correct answer: D. all sectors of the economy including the rest of the world.
- A. the household and government sectors
- B. the household sector.
- C. all sectors of except the rest of the world
- D. all sectors of the economy including the rest of the world.
Explanation
Aggregate demand is planned expenditure by households, firms, government and the foreign sector, represented by C + I + G + (X − M). Thus it includes demand connected with the rest of the world through net exports.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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