The Classical Economists Believed in the Self-Correcting Nature of the Economic

question 35

Multiple Choice

The classical economists believed in the self-correcting nature of the economic system.What did they believe were the major adjustment mechanisms?  

• A) inflexible wages, inflexible prices, and flexible interest rates 
• B) flexible wages, flexible prices, and flexible interest rates 
• C) sticky wages, sticky prices, and sticky interest rates 
• D) inflexible interest rates, flexible wages, and flexible prices

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Definitions:

Elastic Demand

A situation where the demand for a product is sensitive to price changes.

Fresh Tomatoes

Refers to tomatoes that are recently harvested and have not been processed, often used in cooking for their flavor and nutritional value.

Highly Elastic

Referring to a situation where the quantity demanded or supplied responds significantly to changes in price.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.