Which of the Following Policy Statements Would a Classical Economist

question 145

Multiple Choice

Which of the following policy statements would a classical economist tend to support?

• A) The government should be prepared to intervene when aggregate demand changes in any way.
• B) The government should only intervene in the economy when aggregate demand decreases.
• C) The government should allow the economy to adjust to changes in aggregate demand on its own,without interference.
• D) The government should frequently change taxes and spending levels to manipulate the economy.
• E) The government should only intervene in the economy when aggregate demand increases.

---

Definitions:

Structural Model

A representation that outlines the arrangement and connectivity of components within a system or theory.

Iceberg Model

A metaphor used in psychology and other fields to illustrate that only a small part of a person's mind or situation is visible, while the majority is hidden beneath the surface.

Libido

A term used in psychoanalytic theory to denote the energy associated with sexual drives and desires.

Oedipus Complex

A Freudian theory that suggests a child's unconscious sexual desire for the opposite-sex parent and jealousy toward the same-sex parent.