Classical Economists Believed All of the Following EXCEPT That

question 110

Multiple Choice

Classical economists believed all of the following EXCEPT that:

• A)there could be temporary periods of unemployment.
• B)emphasis should be on the long run, and in the long run all would be set right because of the smooth functioning of the price system.
• C)the Great Depression would be a short-run aberration.
• D)monetary policy could tame the business cycle.

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Definitions:

Elastic

Describes a situation in economics where the supply or demand for a good or service is sensitive to changes in price. In other words, a small change in price results in a larger change in quantity demanded or supplied.

Tax Burden

The measure of the total amount of taxes that an individual or business must pay, relative to their income or profit.

Yachts

Luxury vessels used for personal or recreational purposes, often considered a symbol of wealth and luxury.

Rent Controls

Government-imposed limits on the rent that landlords can charge tenants, intended to keep housing affordable.