Because markets may not clear for several months or even several years,the classical model
A) is no longer considered valuable by mainstream economists
B) has no value when explaining a situation where excess supply exists
C) is irrelevant to any discussion of a market in which excess demand exists
D) does a better job of explaining short-term fluctuations than long-run growth
E) does a better job of explaining long-run growth than short-run fluctuations

Question

Quizplus · Accepted Answer

The classical model is better suited to explaining long-run growth rather than short-run fluctuations, as markets may take a significant amount of time to clear. Therefore, the classical model may not be effective in explaining situations where there is excess supply or demand in the short term.

Because Markets May Not Clear for Several Months or Even