The Classical Economists Believed in All of the Following Except

question 97

Multiple Choice

The classical economists believed in all of the following except

• A)wages and prices are flexible downward.
• B)insufficient aggregate demand could keep an economy in a depression for an extended period of time.
• C)recessions were temporary because the economy is self-correcting.
• D)laissez faire was the best policy a government could pursue.

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Definitions:

Petty Cash Account

A small amount of cash on hand used for paying expenses too small to merit writing a check.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.

Money Market Accounts

Interest-bearing accounts offered by financial institutions, combining the benefits of both savings and checking accounts, typically with higher interest rates.

Commercial Paper

An unsecured, short-term debt instrument issued by companies to finance their operational expenses.