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Question
What is the formula for aggregate demand (AD) in an open economy?
Options
AD = C + I + G
AD = C + I + G + (X - M)
AD = C + G + (X - M)
AD = I + G + X
MCQ
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Solution
AD = C + I + G + (X - M)
Explanation:
AD represents total planned spending, including consumption, investment, government spending, and net exports (exports minus imports).
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