The transaction you mentioned, where the Jones family buys a new car, falls into the
in aggregate expenditure.
Aggregate expenditure is the total spending in an economy, consisting of
consumption, investment, government spending, and net exports. Here's a brief
overview of each category:
: This is the total spending by households on goods
and services. The purchase of a new car by the Jones family falls into this
: This is the total spending by businesses on capital
goods, such as machinery, buildings, and other equipment.
: This is the total spending by the government on
public goods and services, such as infrastructure, public safety, education, and
: This is the total value of a country's exports minus the total value
of its imports.
Here's a table summarizing these categories: