Problem
I. Consider three economies, A, B, and C. Aggregate desired expenditure (AE) in economy A is composed of only consumption expenditures and Investment, in economy B is composed of consumption expenditures, investment expenditures, and government purchases, and in economy C is composed of all those expenditures in Economy B plus net exports expenditures.
II. Derive the formula for aggregate expenditure function for each economy as a function of autonomous expenditures and induced expenditures.