Classical Economists Believed That

question 29

Multiple Choice

Classical economists believed that

• A)if saving exceeded investment,prices and interest rates would rise as business accumulated unwanted inventories.
• B)flexible prices and wages could not restore an economy to full employment if the interest rate were rigid.
• C)flexible interest rates,wages,and prices would assure full employment.
• D)voluntary unemployment reflected economic inefficiency.
• E)all unemployment was involuntary.

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Definitions:

Cost of Goods Sold

Direct costs attributable to the production of the goods sold by a company.

Accounts Receivable Period

measures the average number of days it takes a company to collect payment after a sale has been made, indicating the efficiency of its credit policies.