Explore BrainMass

Explore BrainMass

    Components of Aggregate Expenditure

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    List the components of aggregate expenditure. Choose two of these components, and explain the composition of each.

    © BrainMass Inc. brainmass.com October 10, 2019, 3:10 am ad1c9bdddf

    Solution Preview

    The Aggregate Expenditures Equation

    The following equation is commonly used to summarize the four components that make up aggregate expenditures:

    AE = C + I + G + (X - M)

    The notation used here is relatively straight forward. AE is aggregate expenditures; C is consumption expenditures by the household sector; I is investment expenditures on capital goods by the business sector; G is government ...

    Solution Summary

    This solutions discusses the components of Aggregate Expenditure (AE) based on the formula:
    AE = C + I + G + (X - M)