Classical economists believed that
a. the market system always operated at a position of full employment.
b. occasional problems of unemployment could occur but would be quickly eliminated by the system of self-regulating markets.
c. the price level would adjust to balance planned saving with planned investment.
d. the economy had several possible equilibrium output levels.
b. occasional problems of unemployment could occur but would be quickly eliminated by the system of self-regulating markets.
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Suppose that a city law requires taxi drivers to wear tuxedos. The drivers must pay $10 per week for the tuxedos. Taxicab companies pay their drivers $210 per week. After paying for the tuxedos, taxi drivers earn $200 per week.
(i) If the law were revised so that taxicab companies, not the drivers, must pay for the tuxedos, what would happen to the taxi drivers' earnings? (ii) If the law were repealed, what would happen to the taxi drivers' earnings? Be as specific as possible.
The value of goods produced in a previous year but sold in the current year is added to the GDP for the current year
Indicate whether the statement is true or false
Which of the following is NOT a device to reduce transaction costs?
A) shopping centers B) auto dealers located close together C) government prohibitions on advertising D) banks that direct funds from savers to borrowers
Which of the following is not an advantage of a global currency?
a. International transactions would have fewer transactions costs. b. Travel would be simplified. c. A global currency would foster competition due to increased price transparency. d. All of these are advantages.