The popular theory prior to the Great Depression that the economy will automatically adjust to achieve full employment in the long run is:
A) supply-side economics.
B) Keynesian economics.
C) classical economics.
D) mercantilism

Question

Quizplus · Accepted Answer

The popular theory prior to the Great Depression that the economy will automatically adjust to achieve full employment in the long run is called classical economics. Classical economists believed in a laissez-faire approach, where the government did not intervene in the economy, and the market would correct itself over time. This theory was later challenged by Keynesian economics, which argued that government intervention was necessary to stabilize the economy, particularly in times of economic crises like the Great Depression. Supply-side economics is a more recent economic theory that emphasizes the importance of tax cuts and deregulation in stimulating economic growth. Mercantilism is an outdated economic theory that believed in the accumulation of wealth through exports and trade surpluses.

The Popular Theory Prior to the Great Depression That the Economy