Question

In an open macroeconomy (that trades with other nations) where there is a government and financial markets, there

are FOUR sources of spending. The sum total of these four categories of spending is aggregate expenditures, or “total spending”. What four sources of spending contribute to the quantity of GDP demanded?

-household saving

-businesses investing in capital goods or inventory

-import spending by American households

– government purchases of public goods & services

-domestic spending by consumers

– tax payments to government

– disposable income earned

– foreign purchases of American goods or services

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