Classical macroeconomists recommend
A)policies that actively offset changes in long-run aggregate supply that result in negative economic growth.
B)an increase in the quantity of money to offset decreases in aggregate demand and a decrease in the quantity of money to offset increases in aggregate demand.
C)policies that actively offset changes in aggregate demand that bring recession.
D)policies that minimize the disincentive effects of taxes on employment, investment, and technological change.
E)all of the above

Question

Quizplus · Accepted Answer

Classical macroeconomists focus on long-term growth and recommend policies that minimize the disincentive effects of taxes on employment, investment, and technological change. They do not recommend actively offsetting changes in aggregate demand that bring recession or using monetary policy to manipulate aggregate demand. Similarly, they do not recommend actively offsetting changes in long-run aggregate supply, as they believe the economy will naturally adjust over time.

Classical Macroeconomists Recommend