Aggregate demand for final goods consists which of the following?

(A) Ex-ante consumption.
(B) Ex-ante Investment.
(C) Government spending.
(D) Effective demand.

Choose the correct answer from the options given below:

(A), (B) and (C) only

The correct answer is Option (2) → (A), (B) and (C) only

The aggregate demand (AD) for final goods and services in an economy refers to the total planned (ex-ante) expenditure on domestically produced goods and services during a given period.

It includes:

• (A) Ex-ante consumption (C) → planned consumption expenditure by households.

• (B) Ex-ante investment (I) → planned investment expenditure by firms.

• (C) Government spending (G) → expenditure by the government on goods and services.

Hence, AD=C+I+G

• (D) Effective demand is not a component of aggregate demand; it is the level of AD that equals aggregate supply at equilibrium.