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Classical Economists Believe That Savings Is Crucial for Economic Growth

Question 104

Multiple Choice

Classical economists believe that savings is crucial for economic growth because


A) savings leads to investment spending, which increases output.
B) prices are sticky and will not prevent the economy from adjusting to full employment.
C) supply is less important than demand in determining economic output.
D) the government needs to intervene in the economy and needs savings to do so.
E) the short run is more important than the long run, and economic policy only works in the short run.

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