Classical Economic Theory Predicted That in the Long Run the Economy

question 38

Multiple Choice

Classical economic theory predicted that in the long run the economy would experience:

• A) below full unemployment.
• B) rising rate of inflation.
• C) full employment.
• D) idle factors of production.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, indicating the cost of borrowing money or the return on invested funds.

Term

A specified period of time during which certain conditions or agreements apply, or the definition of a concept or expression in specific contexts.