Question

All of the following principal components are subparts of the AD, EXCEPT: Group of answer choices...

All of the following principal components are subparts of the AD, EXCEPT:

Group of answer choices

a. Planned investments

b. Government purchases

c. Income taxes

d. Consumption

e. Net exports

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Homework Answers

Answer #1

In the Keynesian model, Aggregate demand means demand for a goods or services by all the people in the country. The graphical representation of the AD is aggregate demand curve.

AD= consumption + Investment + Government expenditure + export – Import

It means aggregate demand includes government purchases and taxes, consumer spending and investment spending and export minus import.

Hence it can be said that except income taxes, all are sub part of the aggregate demand.

Hence option c is the correct answer.

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