The new classical interpretation of the economy suggests that:

Question

Quizplus · Accepted Answer

The new classical interpretation of the economy suggests that, in the long run, the economy will always return to its natural level of output, which is determined by its production possibilities and resource constraints. This means that fluctuations, such as expansions and recessions, are only temporary and cannot persist indefinitely. Therefore, output is always equal to the natural level in the long run.

The New Classical Interpretation of the Economy Suggests That