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Give reason or explain.Investment demand is not the sole determinant of aggregate demand. |
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Answer» Investment demand is not the sole determinant of aggregate demand. Apart from investment demand, consumption demand, government demand, exports and imports are also the components of aggregate demand. AD = C + I + G + (X – M) Where, Demand by households - Private consumption expenditure (C) Demand by firms - Private investment expenditure (I) Demand by government - Government expenditure (G) Demand by foreign sector- Net exports (X – M) Where, X is exports and M is imports. |
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