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Exhibit: Economic Adjustments
-(Exhibit: Economic Adjustments) Suppose the economy is at point c. A classical economist would advocate
A) allowing the economy's self-correcting mechanism to move the economy to point a.
B) pursuing expansionary fiscal policies to move the economy to point a.
C) pursuing expansionary fiscal policies to move the economy to point b.
D) pursuing expansionary fiscal policies to move the economy to point d.

Question

Use the following to answer questions.
Exhibit: Economic Adjustments 
-(Exhibit: Economic Adjustments) Suppose the economy is at point c. A classical economist would advocate
A) allowing the economy's self-correcting mechanism to move the economy to point a. 
B) pursuing expansionary fiscal policies to move the economy to point a. 
C) pursuing expansionary fiscal policies to move the economy to point b. 
D) pursuing expansionary fiscal policies to move the economy to point d.

Quizplus · Accepted Answer

A classical economist would advocate allowing the economy's self-correcting mechanism to move the economy to point a. This is because they believe that the economy has a natural tendency towards equilibrium, and that any interference with this process would only prolong the adjustment process and lead to further imbalances.

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