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Which of the following is not true about classical economists?

a.

 They criticized mercantilism as an economic system.

b.

 They advocated laissez-faire policies to promote economic growth.

c.

 They believed the economy would naturally tend toward full employment.

d.

 They believed prices and wages were flexible.

e.

 They sought government intervention in markets to promote fairness.

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Related questions

1. Classical economists believed that

a. the government can best help the economy by leaving it alone

b. the economy is controlled by the government

c.Ā laissez-faire will hurt the economy

d. the government should play an active role in controlling the economy

e. economists should offer guidance to governmental leaders.

Ā 

2.Ā If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent, the economy is

a. experiencing high prices and low inflation

b. experiencing a slump

c. experiencing an increase of 2 percent in real annual per capita GDP

d. not achieving full economic potential

e. producing along its production possibilities frontier

Ā 

3.Ā From 1929 to 1993, the first four years of the Great Depression, U.S. output dropped by more than

a. 5 percent

b. 10 percent

c. 80 percent

d. 25 percent

e. 50 percent

Ā 

4.Ā Economists regardĀ someĀ inflation as good for the economy.

a. True

b. False

Ā 

5.Ā The inflation rate in the United States has always been positive.

a. True

b. False

Ā 

6.Ā Why is inflation considered a problem?

a. It is costly for society.

b. Government gains too much economic power

c. Firms gain too much economic power

d.Ā It is always very high when it exists.

e. People prefer falling prices

Please help wtih these economics questions. I'll give the best answer to the person who justifies their answer.. or someone who does well in economics and knows the subject area well.

Which of the following statements is not true about Say's Law?

A. People produce more goods than they want for their own use only if they seek to trade them for other goods.

B. Markets would be regularly hit by severe shortages and surpluses.

C. Desired expenditures will equal actual expenditures.

D. Surpluses will be eliminated by falling prices and shortages will be eliminated by increasing prices.


Which of the following is not an assumption of the classical model?

A. Buyers and sellers react to changes in relative prices.

B. Households want to maximize economic well being.

C. Wages and prices will move freely in the upward direction but not the downward direction.

D. No single buyer or seller of a commodity can affect its price.


Money illusion is

A. when people think they are better off when their income increases even though prices have increased by the same amount.

B. when people are motivated by self-interest.

C. could not exist if the economy did not have competitive markets.

D. a basic condition that all classical economists assume people have.


Saving is not a problem in the classical model because

A. interest rates were flexible and savings were channeled into investment.

B. savers and investors were the same people.

C. the classical economists assumed that saving was beneficial to people for retirement.

D. saving would be spent by consumers eventually.


Which of the following statements is true?

A. There is an inverse relationship between investment and the interest rate.

B. There is no relationship between investment and the interest rate.

C. There is a direct relationship between investment and the interest rate.

D. Investment is always less than savings.


In the classical model, high unemployment due to either a demand or a supply shock

A. will return to its normal level quickly as wages adjust.

B. will persist if due to a supply shock but not if due to a demand shock.

C. can persist for an indefinite period of time.

D. never exists because unemployment can never deviate from its normal level.


The classical model makes little distinction between the long-run and short-run because

A. the model has not been fully developed yet.

B. prices adjust so fast that the economy is quickly moving towards the long-run.

C. the classical economists knew that we are always operating in the short run.

D. current changes influence the long run, so it is not possible to plan for the future.


In the classical model

A. the level of real GDP per year does not depend on the level of aggregate demand.

B. the level of GDP is demand determined.

C. the level of GDP determines prices independent of demand.

D. changes in aggregate supply affect the price level, not real GDP.


Which of the following is a true statement?

A. Classical economists believed output adjusted more than prices when aggregate demand fell while Keynes believed prices adjusted more than output.

B. Classical economists believed price adjusted more than output when aggregate demand fell while Keynes believed output adjusted more than prices.

C. A decrease in aggregate demand has no short-run effects according to the classical economists, but had significant effects according to Keynes.

D. A decrease in aggregate demand was not possible according to the classical economists, but was possible according to Keynes.


Which of the following is not a reason why GDP can be expanded beyond a level consistent with its long-run growth path in modern Keynesian analysis?

A. Prices and wages are flexible allowing for needed adjustments.

B. In the short-run existing workers can work more hours.

C. The existing capital stock can be used more intensively.

D. Higher prices induce firms to hire more workers.


A recessionary gap can be caused by

A. a decrease in aggregate supply holding aggregate demand constant.

B. an increase in aggregate demand holding aggregate supply constant.

C. an increase in the long run aggregate supply curve holding the aggregate demand constant.

D. a decrease in both aggregate demand and aggregate supply.




11. A Keynesian economist would be most likely to agree with whichof the following statements?
A) Government policies do not affect economic activity.
B) Government can implement policy proposals that can positivelyimpact the economy.
C) Most government policies would probably make things worse.
D) The economy ought to be left to market forces.

1. A Classical economist would be most likely to agree with whichof the following statements?
A) Government policies do not affect economic activity.
B) Government can implement policy proposals that can positivelyimpact the economy.
C) Most government policies would probably make things worse.
D) Government intervention in the market is necessary for asmoothly operating economy.

2. What event shifted public opinion away from a laissez-faire viewof government towards a more activist view?
A) World War I.
B) The Great Depression.
C) World War II.
D) The Vietnam War and the social turbulence of the 1960s.

3. Classical economists argued that unemployment during theDepression could be reduced by:
A) eliminating labor unions and government policies that kept wagestoo high.
B) strengthening unions and government regulations protectingunions and workers.
C) increasing real wages so that people are encouraged towork.
D) lowering taxes.


4. The level of income an economy can produce without generatinghigher inflation is called:
A) potential income. B) equilibrium income. C) nominal income. D)real income.

5. Keynes believed equilibrium income __________ potentialincome:
A) always equaled C) was always above
B) was always below D) could be above, below, or equal to

6. The aggregate demand, short-run aggregate supply, and long-runaggregate supply curves are based upon the:
A) principle of substitution.
B) principle of opportunity cost.
C) relationship between a single good and its price.
D) relationship between the price level and total output.

7. For some time now, the U.S. has been pressuring Japan toinstitute policies to improve its weak economy. What effect wouldthese policies have on the U.S.?
A) They would cause the U.S. to move up its aggregate demandcurve.
B) They would cause the U.S. to move down its aggregate demandcurve.
C) They would shift the U.S. aggregate demand curve left.
D) They would shift the U.S. aggregate demand curve right.

8. If companies begin to expect an improvement in the businessclimate, this will cause:
A) a movement down the aggregate demand curve.
B) a movement up the aggregate demand curve.
C) a rightward shift of the aggregate demand curve.
D) a leftward shift of the aggregate demand curve.

9. The effect that a change in the distribution of income has onthe aggregate demand curve is based on the observation that:
A) workers are less likely than stockholders to save the incomethey receive.
B) stockholders are less likely than workers to save the incomethey receive.
C) workers and stockholders are equally likely to save the incomethey receive.
D) the distribution of income is always shifting in favor ofworkers.

10. If total income remains the same but wages fall, the aggregatedemand curve will most likely:
A) shift to the right. B) shift to the left. C) become flatter. D)become steeper.

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