According to Classical Macroeconomic Theory

question 163

Multiple Choice

According to classical macroeconomic theory,

• A)the price level is sticky in the short run and it plays only a minor role in the short-run adjustment process.
• B)for any given level of output,the interest rate adjusts to balance the supply of,and demand for,money.
• C)output is determined by the supplies of capital and labor and the available production technology.
• D)All of the above are correct.

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Definitions:

Operating Constraints

Limitations or restrictions that affect the performance or output of a process or system.

Maximum Output

The highest level of production that a company can sustain with the current resources and technologies.

Capacity

The throughput, or number of units a facility can hold, receive, store, or produce in a period of time.

Demand

The quantity of a product or service that consumers are willing and able to purchase at a certain price.