1. Classical economists believe that a. the economy will adjust to at full emplo
ID: 1140484 • Letter: 1
Question
1. Classical economists believe that
a. the economy will adjust to at full employment of resources.
b. the economy was never at full employment of resources.
c. the producer can produce more of the product at the same price.
d. the economy is approaching full employment as wages and prices increase.
e. there are many unemployed resources.
a. the economy will adjust to at full employment of resources.
b. the economy was never at full employment of resources.
c. the producer can produce more of the product at the same price.
d. the economy is approaching full employment as wages and prices increase.
e. there are many unemployed resources.
Explanation / Answer
The classical economists believed in the self correction mechanism of the economy that is the economy always move towards the equilibrium. According to them supply creates its own demand, if there is any disequilibrium in the economy the self correcting mechanism in the economy would bring back the economy to equilibrium.
Ans: A. The economy will adjust to the full employment of resources.
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