MACROECONOMICS FOR TODAY
MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
Question
Chapter 16.A, Problem 10SQ
To determine

The classical policy when the economy operates above its potential real GDP.

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Which of the following is a belief of classical theory? A. Long-run full employment B. Inflexible wages C. Inflexible prices D. All of the above answers are correct
From 1990 to 1995, the U.S. economy was in a recessionary gap.  According to the classical economists, which of the following should have occurred? Group of answer choices   interest rates should have fallen which would increase consumer and investment spending   prices should have fallen which would increase consumer spending   all of the above should have occurred   wages should have fallen which would cause more workers to be hired
Which of the following statements is inconsistent with Classical Theory? A.The economy will eventually produce at the full-employment level of output. B.The economy is self-regulating. C.The economy has an environment of “invisible hand”. D.The economy has inflexible wages and prices.
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