What is the aggregate expenditures model?

• A. A model analyzing long-run interactions of aggregate demand and aggregate supply to determine the economy's natural level of output and the general price level.
• B. A model that considers only household consumption decisions to predict national output, ignoring investment, government spending, and net exports.
• C. A model describing how changes in the money supply determine inflation and interest rates through the quantity theory of money.
• D. A short-run macroeconomic model that relates planned total spending (consumption, investment, government purchases, net exports) to real GDP and determines equilibrium output where planned spending equals actual output.

Answer: (D)