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AE Model: Private Closed Economy
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Problem 10
AE Model: Private Closed Economy
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16. Deriving the Aggregate Expenditures Model / AE Model: Private Closed Economy / Problem 2
Problem 2
How does the removal of government purchases and net exports simplify the aggregate expenditures model?
A
It increases the complexity of the model.
B
It makes the model dependent on international trade.
C
It reduces the model to only consumption and investment.
D
It eliminates the need for a consumption function.
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