Explain the policy implications of the classical economists' beliefs
The classical economists believed that the economy was self-regulating. Their view was that any recessionary or inflationary gaps would be eliminated through changes in the markets. They believed that wages, prices, and interest rates would adjust to clear any overproduction, or underproduction, of goods and services. Given that they believed that the economy could heal itself, they saw no need for government intervention in the economy. These beliefs caused the classical economists to advocate a macroeconomic policy of laissez faire.
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According to researcher DeVito in the book, several factors will influence your choice of conflict strategies, but this is not one of them
a. Goals b. Emotional State c. Cognitive assessment of the situation d. Intimacy level
If equilibrium GDP is below potential, then
a. unemployment is unusually low b. the Fed will lower the money supply c. the wage rate will fall as workers compete for scarce jobs d. the aggregate supply curve will shift leftward e. the wage rate will remain stable as labor productivity increases
Land includes all of the following except
a. a virgin forest b. natural-state real estate c. oil under the oceans d. deposits of copper e. an irrigation system
Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor, changing the gap in earnings between these two groups. Which of the following statements best describes this hypothesis?
a. Unskilled labor is plentiful and cheap in the US, so the US tends to export goods produced with unskilled labor and import goods produced with skilled labor. b. Unskilled labor is plentiful and cheap in many foreign countries, so the US tends to import goods produced with unskilled labor and export goods produced with skilled labor. c. Computers raise the demand for skilled workers and reduce the demand for the unskilled workers whose jobs are replaced by the computers. d. Greater demand for skilled labor has led to higher wages for those workers and greater demand for imported products.