Which of the Following Economic Statements Would a Classical Economist

question 158

Multiple Choice

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

• A) The short run deserves more focus than the long run.
• B) The market tends toward stability and full employment.
• C) Savings is a drain on aggregate demand and can reduce economic growth.
• D) Government intervention is often necessary to stimulate or moderate economic performance.
• E) Prices tend to be rigid and inflexible.

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Definitions:

Unit Product Cost

The total cost (variable and fixed) incurred to produce, store, and sell one unit of a product.

Elastic Demand

Describes a market condition in which the demand for a product is sensitive to price changes.

Target Costing

A pricing strategy in which the selling price and profit margin are used to determine the maximum cost that can be incurred on a product, with the aim of ensuring competitiveness and profitability.

Target Profit

The specific net income a business intends to reach within a designated timeframe.