Prior to the 1970s, the model of choice was the aggregate expenditures model. According to Jthis model, if the economy was in equilibrium below full employment, then the primary economic problem would be
A) unemployment.
B) deflation.
C) financing the government budget deficit.
D) financing unemployment compensation.

Question

Quizplus · Accepted Answer

According to the aggregate expenditures model, if the economy is in equilibrium below full employment, it means that there is insufficient demand for goods and services in the economy, resulting in unemployment. Therefore, the primary economic problem would be unemployment.

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