According to the classical view,if consumer demand slowed down,
A)Prices would decrease,and the economy would return to its long-term growth trend.
B)Prices would increase,and the economy would return to its long-term growth trend.
C)Wages would increase,and the economy would return to its long-term growth trend.
D)Investment and government demand would increase, and the economy would return to its long-term growth trend.

Question

Quizplus · Accepted Answer

According to the classical view, if consumer demand slows down, prices would decrease as businesses try to clear their inventory to maintain their profit margins. This would lead to an increase in demand as consumers take advantage of lower prices, eventually returning the economy to its long-term growth trend.

According to the Classical View,if Consumer Demand Slowed Down