Questions: Aggregate expenditure, or the total amount of spending in the economy, equals A. household spending on durable goods plus business investment spending. B. household spending on durable goods plus household spending on nondurable goods. C. consumption spending plus planned investment spending plus government purchases plus net exports. D. total spending by households plus total spending by businesses.

Aggregate expenditure, or the total amount of spending in the economy, equals A. household spending on durable goods plus business investment spending. B. household spending on durable goods plus household spending on nondurable goods. C. consumption spending plus planned investment spending plus government purchases plus net exports. D. total spending by households plus total spending by businesses.
Transcript text: Aggregate expenditure, or the total amount of spending in the economy, equals A. household spending on durable goods plus business investment spending. B. household spending on durable goods plus household spending on nondurable goods. C. consumption spending plus planned investment spending plus government purchases plus net exports. D. total spending by households plus total spending by businesses.
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Solution

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The answer is C: consumption spending plus planned investment spending plus government purchases plus net exports.

Explanation for each option:

A. Household spending on durable goods plus business investment spending: This option is incorrect because it only includes a portion of the total spending in the economy. Aggregate expenditure encompasses more than just durable goods and business investments.

B. Household spending on durable goods plus household spending on nondurable goods: This option is incorrect because it only accounts for household consumption, ignoring other components like investment, government spending, and net exports.

C. Consumption spending plus planned investment spending plus government purchases plus net exports: This option is correct. Aggregate expenditure is the total amount of spending in an economy and is calculated by summing up consumption spending, planned investment spending, government purchases, and net exports (exports minus imports).

D. Total spending by households plus total spending by businesses: This option is incorrect because it does not include government spending and net exports, which are essential components of aggregate expenditure.

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