The Largest Component of Aggregate Expenditure Is

question 210

Multiple Choice

The largest component of aggregate expenditure is

• A) consumption spending
• B) government purchases
• C) net exports
• D) capital expenditures
• E) investment spending

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Definitions:

Capital Budgeting

The process a business undertakes to evaluate and prioritize investments in long-term assets based on their potential to generate income.

Incremental Sales

Sales generated over and above a predefined baseline, often used to measure the effectiveness of sales promotions or new marketing strategies.

Operating Expenses

The costs associated with the normal day-to-day operations of a business, excluding costs directly related to producing goods.

Capital Budgeting

The method of assessing and choosing investments for the long term that align with the company's objective of maximizing wealth.