In the three-sector model of a closed economy (neglecting foreign trade), what are the three components of aggregate demand?

CA Foundation · Business Economics · PYQS · September 2024
In the three-sector model of a closed economy (neglecting foreign trade), what are the three components of aggregate demand?
(A) A. Consumption, Exports, and Government Spending
(B) B. Consumption, Savings, and Investment
(C) C. Consumption, Investment, and Government Spending
(D) D. Consumption, Imports, and Exports

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Consumption, Investment, and Government Spending

Topics: Theory of Demand and Supply, International Trade

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