Which of the following is not one of the 4 main categories of spending included in PAE?

A. consumption

B. net exports

C. government purchases

D. taxes

The answer is D.

Taxes are not categorized under government expenditure but rather as a source of revenue. When calculating the aggregate expenditure, one sums up all household consumption, investments, purchases made by the government, and the net exports. Net exports are computed by deducting the monetary value of imports from the value of exports. On the other hand, various taxes, such as income, property, sales and import taxes are the sources of income for the government. However, in instances where the government has a budget deficit, they acquire more finances through loans.