Consider the Equation: AE = C + I + G

question 5

Multiple Choice

Consider the equation: AE = C + I + G + (X - IM) .Which of the following statements correctly describes this sum?

• A)This summation tells us total desired expenditures on domestically produced output.
• B)It is a summation of actual expenditures and is equivalent to GDP.
• C)This summation of planned expenditures is equal to actual nominal GDP.
• D)It is a summation of planned expenditures and is always equal to real GDP.
• E)It is a summation of the desired expenditures of domestic households,firms and government.

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