Which term refers to all expenditures by households on goods and services in an economy?

• A. Consumption expenditures
• B. Investment expenditures
• C. Net exports
• D. Government expenditures

Answer: (A)

Verified step by step guidance

1. Understand the context of the question: it asks for the term that describes all spending by households on goods and services within an economy.
2. Recall the main components of aggregate expenditure in macroeconomics, which typically include consumption expenditures, investment expenditures, government expenditures, and net exports.
3. Identify that consumption expenditures specifically refer to the total spending by households on goods and services for personal use.
4. Recognize that investment expenditures relate to business spending on capital goods, government expenditures refer to government spending, and net exports represent the difference between exports and imports.
5. Conclude that the term describing all household spending on goods and services is 'Consumption expenditures'.