If the economy is not operating at full-employment real GDP, classical economists prescribe a government policy of nonintervention.

Question

Quizplus · Accepted Answer

Classical economists believe in the self-correcting nature of the economy and suggest that market forces will eventually lead it back to full-employment equilibrium without government intervention. They argue that any attempt by the government to intervene in the market will only lead to inefficiencies and distortions in the long run.

If the Economy Is Not Operating at Full-Employment Real GDP