Which of the Following Policy Statements Would a Classical Economist

question 37

Multiple Choice

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

• A) The government should be prepared to intervene when the economy changes in any way.
• B) The government should only intervene in the economy when total output decreases.
• C) The government should allow the economy to adjust to changes in 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 total output increases.

Analyze the impact of default risk premiums on bond yields.

Comprehend the concept of bond ratings and their importance in investment decisions.

Understand the features and valuation of coupon bonds.

Explain the principles underlying the safer versus riskier bonds assessment.

---

Definitions:

Minority Of One

A situation where a single individual's opinion, behavior, or belief stands in opposition to that of the larger group.

Ally

A person, group, or nation that is united with another or others for some common purpose or benefit.

Majority Opinion

The judicial opinion agreed to by more than half of the members of a court that sets forth the decision reached in a case.

Asch's Studies

A series of experiments conducted by Solomon Asch focusing on the effects of peer pressure on conformity, demonstrating how individuals yield to or defy a majority group.