Final answer:
The four sources of aggregate demand are consumption expenditure, investment expenditure, government spending, and net exports (exports minus imports). These components represent the total spending economy-wide on domestic goods and services.
Step-by-step explanation:
The question you've asked pertains to the key components that make up aggregate demand in economics. Aggregate demand refers to the total spending economy-wide on domestic goods and services. There are four sources of aggregate demand:
- Consumption expenditure: This is the spending by consumers on goods and services.
- Investment expenditure: This encompasses business spending on capital such as machinery, tools and buildings.
- Government spending: This includes federal, state, and local government expenditure on public services and infrastructure.
- Net exports (exports minus imports): This is the value of a country's exports minus its imports.
Each of these components can be influenced by economic events and policy decisions, such as government tax and spending changes, consumer and business confidence, changes in the prices of key inputs like oil, and technological advancements that improve productivity.