Classical Economists Believe That When Aggregate Demand Changes,the Economy Remains

question 143

Multiple Choice

Classical economists believe that when aggregate demand changes,the economy remains at full employment because

• A) changes in aggregate demand do not affect prices.
• B) prices are very flexible.
• C) the government requires that the economy perform at full employment.
• D) international trade offsets any changes in demand.
• E) consumers and producers are not a part of aggregate demand.

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Definitions:

Molecule

The smallest unit of a chemical compound that can exist; composed of two or more atoms held together by chemical bonds.

Covalent Bonds

A chemical bond formed by the sharing of electron pairs between atoms.

Electronegativity

A measure of the ability of an atom in a chemical compound to attract electrons towards itself.

Polarity

A property of molecules with unequal distribution of charges, resulting in molecules having positive and negative ends.