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Question
What does \[C\] represent in \[AD=C+I\]?
Options
Ex-ante Consumption Expenditure
Change in inventories
Autonomous Consumption
Marginal Propensity to Consume
MCQ
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Solution
In the aggregate-demand expression, \[C\] denotes Ex-ante Consumption Expenditure. It is planned consumption expenditure, not Autonomous Consumption.
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