Explanation Aggregate expenditure is the summation of all the individual expenditures in the economy from all the economic agents. There are mainly four agents, which include households, businesses, government, and the net exports. The household expenditures are made for the consumption denoted by C, the business expenditures are made for investment denoted by I, government expenditures by G, and the net exports by (X-M). The summation of all these expenditures in the economy is known as the aggregate expenditure of the economy. Option (c): The aggregate expenditure is the summation of all the expenditures made by the economic agents in the economy. The major economic agents are consumers (C), investors (I), government (G), and the net exports (X-M). Thus, the summation of all these expenditures gives the aggregate expenditure of the economy as C + I + G + ( X − M ) . Thus, it means that option 'c' is the correct answer. Option (a): The net exports are calculated by subtracting the imports from the exports of the economy and not by adding the two together. Here, in the case of the given formula, the net exports are calculated in a wrong way and that makes option 'a' not the correct answer. Option (b): The given formula is ( C − S ) + I + G + ( X − M )