According to the Classical View,if Consumer Demand Slowed Down

question 29

Multiple Choice

According to the classical view,if consumer demand slowed down,

• A)Prices would decrease,and the economy would return to its long-term growth trend.
• B)Prices would increase,and the economy would return to its long-term growth trend.
• C)Wages would increase,and the economy would return to its long-term growth trend.
• D)Investment and government demand would increase,and the economy would return to its long-term growth trenD.Through the adjustment of prices,the economy quickly rebounds to its potential.

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Definitions:

Simple Interest

Interest calculated solely on the principal amount of a loan or deposit, over a particular time period.

Effective Annual Rates

The real return on an investment, taking into account the effect of compounding interest over multiple periods within a year.

Equal Installments

Periodic payments of the same amount over the term of a loan or investment.

Borrowed

Borrowed refers to funds that have been taken on loan from external sources, which are expected to be paid back with interest over time.