The Aggregate Demand Curve Is Best Represented by Which of the Following

question 16

Multiple Choice

The aggregate demand curve is best represented by which of the following equations?

• A) AD = C + I + G + NX
• B) AD = C + I + G - NX
• C) AD = C + I + G
• D) AD = C + I
• E) AD = C + I - G - NX

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Definitions:

Expectancy-value Theory

A psychological theory that explains behavior as driven by the belief that one's effort will lead to desired outcomes and the value of those outcomes to the individual.

Goal

denotes an objective or desired outcome that a person or a system aims to achieve.

Effort

The amount of physical or mental energy expended to achieve a goal or perform a task.

Expectancy-value Theory

A psychological theory that explains motivation and behavior as a function of an individual's expectations for success and the value they place on achieving the goal.