In traditional economies, people base economic decisions on the ...

[ETearle]

In traditional economies, people base economic decisions on the precedents established by previous generations.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Using the aggregate expenditure-output model, assume the aggregate expenditures (AE) line is below the 45-degree line at full-employment GDP. This vertical distance is called a(n):
 a. inflationary gap.
  b. recessionary gap.
  c. negative GDP gap.
  d. marginal propensity to consume gap.

[johnpizzaz]

Answer to Question 1

True

Answer to Question 2

b