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Prior to the 1970s, the Model of Choice Was the Aggregate

Question 25

Multiple Choice

Prior to the 1970s, the model of choice was the aggregate expenditures model. According to Jthis model, if the economy was in equilibrium at an income greater than the full employment level, then the primary economic problem would be


A) excessive bank lending.
B) potential crises in financial markets.
C) inflation.
D) excess aggregate demand.

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