Classical macroeconomics was based largely on the foundation of:
A) flexible wages and prices.
B) persistent unemployment.
C) government intervention in the market.
D) Adam Smith's model of imperfectly competitive markets.

Question

Quizplus · Accepted Answer

Classical macroeconomics was built on the assumption of flexible wages and prices, which would allow for the market to self-correct and maintain equilibrium. This idea was heavily influenced by the works of Adam Smith and other classical economists who believed in free markets and minimal government intervention. The concept of persistent unemployment and government intervention were not central to classical macroeconomic theory.

Classical Macroeconomics Was Based Largely on the Foundation Of