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

question 90

Multiple Choice

Prior to the 1970s, the model of choice was the aggregate expenditures model. According to
This 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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Definitions:

Social Environment

The surrounding physical and social environment where people dwell or where specific happenings or growth takes place.

Anticipated Regret

The expectation of feeling regret in the future for actions taken or not taken in the present, which can influence decision-making processes.

Decision Avoidance

The act of choosing not to make a decision or taking steps to avoid making a choice.

Certainty Bias

The tendency for individuals to favor information or options that appear more certain or less ambiguous.