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

question 30

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 below full employment, then the primary economic problem would be

• A) unemployment.
• B) deflation.
• C) financing the government budget deficit.
• D) financing unemployment compensation.

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Definitions:

RRSP

The Registered Retirement Savings Plan is a financial tool for Canadian workers and self-employed persons, facilitating savings and investments for retirement.

Yield

The return in terms of income from an investment, like dividends or interest earned by possessing a specific security.

Compound-interest

Interest computed on both the original sum invested or loaned, as well as on the interest that has been added to this principal amount over earlier periods.

GIC

A Guaranteed Investment Certificate, a Canadian investment that offers a guaranteed rate of return over a fixed period.