If Asked About the Basic Functioning of the Economy,a Classical

question 39

Multiple Choice

If asked about the basic functioning of the economy,a classical economist would claim that

• A) the market tends toward stability and full employment.
• B) the market tends toward instability and cyclical unemployment.
• C) prices are sticky.
• D) the economy needs help in moving back to full employment.
• E) the short run is more significant than the long run.

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Definitions:

Selling Expenses

Expenses incurred directly or indirectly in making a sale, such as commissions, advertising costs, and shipping expenses.

Disallowed Loss

A loss that cannot be claimed for tax deduction purposes because it does not meet certain IRS criteria.

Capital Gains

The profit from the sale of assets or investments when the selling price exceeds the original purchase price.

Adjusted Gross Income

An individual's total gross income minus specific deductions. It's used as the basis for calculating taxable income.