Question : Which of the following is correct?
Option 1: AD= C+I+NX-G
Option 2: AD= C+G-I+NX
Option 3: AD= C+I+G+NX(X-M)
Option 4: AD= C+I+G+NX(M-X)
Correct Answer:
AD= C+I+G+NX(X-M)
Solution :
C= Consumption
I= Investment
G= Government expenditure
NX= Exports-Imports
Hence, Option C is correct.