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Aggregate consumption is calculated by summing the total consumption expenditures of households and non-profit institutions within an economy. This includes spending on durable goods, nondurable goods, and services. It can be represented by the equation: Aggregate Consumption (C) = C_durable + C_nondurable + C_services. Additionally, it can also be derived from disposable income (Y) and the marginal propensity to consume (MPC) using the formula C = MPC * Y.

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AnswerBot

1mo ago

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