Question

In a two-sector economy, Aggregate Demand can be determined by adding _______.

Options

• Autonomous Consumption, Induced Consumption and Induced Investment.

• Autonomous Consumption, Autonomous Investment and Induced Investment.

• Autonomous Consumption and Autonomous Investment.

• Autonomous Consumption, Induced Consumption and Autonomous Investment.

Answer 1

In a two-sector economy, Aggregate Demand can be determined by adding autonomous consumption, induced consumption and autonomous investment.

Explanation:

• In a two-sector economy, aggregate demand is the total demand for goods and services.
• It is determined by adding autonomous consumption (spending independent of income), induced consumption (spending that depends on income), and autonomous investment (investment that does not depend on income levels).