Which of the Following Is Consistent with the Classical Theory

question 106

Multiple Choice

Which of the following is consistent with the classical theory of growth?

• A)Rapid population growth in poor countries
• B)Permanent increases in real wages
• C)Permanent growth in productivity
• D)Permanent increases in living standards

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Definitions:

Long-Run Equilibrium

The intersection of the AD and LRAS curves, when wages and prices have adjusted to their final equilibrium levels.

Marginal Cost

The cost associated with producing one additional unit of a product, important for making efficient production and pricing decisions.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, leading to competition based on product differentiation.

Short Run

A period in economics during which at least one input or factor of production is fixed while others may be variable.