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1. Which of the following statements is incorrect regarding the potential GDP line? A) It refers...

1. Which of the following statements is incorrect regarding the potential GDP line?

A) It refers to the quantity of output the economy can produce

B) It assumes less than full employment of its labor and physical capital.

C) It is a vertical line

2. Which of the following is excluded from being a component of the aggregate expenditure model?

A) import spending

B) consumption

C) government spending

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