According to classical economists,changes in aggregate demand have little effect on the overall economy,and therefore
A) the government will need to stimulate aggregate demand.
B) long-run aggregate supply is the primary source of economic growth.
C) prices are quite rigid and inflexible.
D) unemployment will tend to persist over time.
E) long-run aggregate supply is irrelevant in determining growth.

Question

Quizplus · Accepted Answer

According to classical economists, changes in aggregate demand have little effect on the overall economy because the economy is self-regulating and will naturally adjust to full employment equilibrium in the long run. Long-run aggregate supply is the primary source of economic growth, as it is determined by the factors of production and technological progress. This view emphasizes the importance of supply-side policies, such as reducing taxes and regulations, to promote growth in the long run.

According to Classical Economists,changes in Aggregate Demand Have Little Effect