Question

Which of the following is an Induced component of aggregate expenditure 1. expectations 2. exports 3....

Which of the following is an Induced component of aggregate expenditure

1. expectations

2. exports

3. imports

Homework Answers

Answer #1

Option 1.

  • Induced components of aggregate expenditures refers to those components that lead to more aggregate expenditure within the economy.
  • Exports and imports come under the net exports section of the aggregate expenditures. Other components are consumption expenditure, government expenditure, investment expenditures.
  • Higher and lower Expectations of changes in income can simulate more or less expenditures within the economy.
  • Hence it is considered as an induced component of aggregate expenditure.
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