Question:medium
In a two-sector economy, the Aggregate Demand can be determined by adding ............ and ...............
In a two-sector economy, the Aggregate Demand can be determined by adding ............ and ...............
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In a two-sector economy, remember that Aggregate Demand consists of consumption and investment expenditures.
Updated On: Jan 14, 2026
- consumption, investments
- investments, savings
- consumption, savings
- savings, exports
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The Correct Option is A
Solution and Explanation
In a two-sector economy comprising households and firms, Aggregate Demand (AD) represents the total demand for goods and services. It is calculated by summing consumption expenditure (C) and investment expenditure (I). The defining equation is: \[\text{AD} = C + I\] Consequently, option (A) is the correct choice.
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