The pre-Keynesian or classical economic theory predicted that in the long-run the economy would experience:
A) long periods of high unemployment.
B) rising rates of inflation.
C) only temporary periods of high unemployment.
D) idle factors of production.

Question

Quizplus · Accepted Answer

According to the classical economic theory, any periods of high unemployment were only temporary and a result of market fluctuations. In the long run, the economy would always self-correct to full employment equilibrium, meaning that unemployment would not persist.

The Pre-Keynesian or Classical Economic Theory Predicted That in the Long-Run