According to Classical Economists,changes in Aggregate Demand Have Little Effect

question 88

Multiple Choice

According to classical economists,changes in aggregate demand have little effect on the overall economy,and therefore

• A) the government will need to stimulate aggregate demand.
• B) long-run aggregate supply is the primary source of economic growth.
• C) prices are quite rigid and inflexible.
• D) unemployment will tend to persist over time.
• E) long-run aggregate supply is irrelevant in determining growth.

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Definitions:

Anticommunist Hysteria

describes the fear and suspicion of communism that spread in the United States, especially during the Cold War, leading to widespread accusations and investigations of un-American activities.

Truman's Response

Refers to President Harry S. Truman's policies and actions in response to particular events or challenges during his presidency, such as the use of atomic bombs or the start of the Cold War.

Late 1940s

The end of the decade following World War II, from 1945 to 1949, marked by significant political, social, and economic changes worldwide.

Early 1950s

Refers to the period from 1950 to 1953, a time noted for the post-World War II economic recovery and the beginning of the Cold War era.