In the Keynesian equation for aggregate private sector demand, what does 'C' represent?

In the Keynesian equation for aggregate private sector demand, 'C' represents Consumption. This is a fundamental component of the equation, which illustrates how household consumption expenditures are a key driver of overall demand within an economy.

In the context of the equation, consumption reflects the total amount of goods and services that households are willing and able to purchase at varying levels of income. This is crucial because it shows how consumer behavior can affect economic activity, as increased consumption typically leads to higher production and can drive economic growth.

When examining the other options, they pertain to different economic concepts. Cost refers to the expenditure involved in producing goods or services, which is distinct from the consumption that is represented by 'C.' Credit relates to borrowing and lending practices in the economy, while capital refers to financial assets or physical goods used in production. None of these directly correlate with the measurement of consumer spending illustrated by 'C' in the Keynesian equation. Thus, recognizing 'C' as Consumption is essential for understanding the overall demand dynamics in an economy according to Keynesian economics.