According to the classical economists, _____.a) people will ... Get solutions . Classical economics places little emphasis on the use of fiscal policy to manage aggregate demand. Chegg study. On the contrary, Keynesian economists believe because of price and wage rigidities the economy’s equilibrium output in the long run may be less than its potential output. Classical economists believe that savings is _____, while Keynesian economists believe that savings is _____. 29) Keynesian economists believe that: the economy needs help in moving back to full employment. The iron law of wages is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker.The theory was first named by Ferdinand Lassalle in the mid-nineteenth century. Classical economics is a broad term that refers to the dominant school of thought for economics in the 18th and 19th centuries. What is price-wage rigid C) degenerate into pure monopolies in most industries. (Keynesian economics is a justification for the ‘New Deal’ programmes of the 1930s.) D) suffer from extended periods of sustained unemployment. If the supply is high and there is inadequate demand for it, it is a temporary situation. Chapter 18 quiz Question 1 1 out of 1 points Classical economists believed that: Selected Answer: C. wages and prices were flexible, and as a result, the aggregate supply curve was vertical. Classical economists believe that the commodities markets will also always be in equilibrium, due to flexible prices. Fiscal Policy. . They say that if government intervention is minimal, citizens enjoy a higher standard of living. Textbook Solutions Expert Q&A Study Pack Practice Learn NEW! B. wages and prices were flexible, and as a result, the aggregate supply curve was vertical. 2. Classical economists belief that prices and quantities adjust to the changes in the forces of supply and demand and that the economy produces its potential output in the long run. Find solutions for your homework or get textbooks Search. Question 2 2 out of 2 points Use the following graph to answer the questions that follow. Question 1 2 out of 2 points Classical economists believe that when aggregate demand changes, the economy remains at full employment because: Selected Answer: a. prices are very flexible. 28) Classical economists believe that a market economy will normally 28) A) eliminate the problem of economic scarcity. Classical economists belief that prices and quantities adjust to the changes in the forces of supply and demand and that the economy produces its potential output in the long run. Most consider Scottish economist Adam Smith the … On the contrary, Keynesian economists believe because of price and wage rigidities the economy’s equilibrium output in the long run may be less than its potential output. Classical economists believe that savings is crucial for economic growth because. The term neoclassical economics was coined in 1900. crucial to growth; a drain on demand After year 2 of the Great Recession, the United States began to experience _______ in real GDP and _______ in the unemployment rate. Neoclassical economists believe that a … Followers of neo-classical economics believe strongly that markets must be free. B) achieve full-employment output. One of the reasons why the Great Depression was so … This means that the state should refrain from creating too many rules and regulations. Physics Chemistry Statistics Economics Accounting Computer Science. 29) Which of the following changes shifts the long-run aggregate supply curve to the right? 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