Question:
In a two-sector economy, Aggregate Supply can be determined by adding .............. and .............. (Choose the correct option to fill in the blanks)
In a two-sector economy, Aggregate Supply can be determined by adding .............. and .............. (Choose the correct option to fill in the blanks)
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In a two-sector model, consumption and investment are the main components determining aggregate demand and supply.
Updated On: Jun 30, 2025
- Consumption, investments
- Investments, savings
- Consumption, savings
- Savings, exports
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The Correct Option is A
Solution and Explanation
In a two-sector economy, aggregate supply is the sum of consumption and investments. Consumption refers to the total spending by households, and investment refers to the spending by businesses. These two components together make up the total output of the economy.
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