Classical economists argue that
A)the government should have an active role in the economy.
B)government policies will be ineffective and counterproductive.
C)the government should actively intervene in the economy to eliminate business cycles.
D)wages and prices don't adjust quickly, so the economy is slow to return to equilibrium.

Question

Quizplus · Accepted Answer

Classical economists believe in laissez-faire economics, which means limited government intervention in the economy. They argue that government policies will be ineffective and counterproductive, and that the economy will self-regulate and return to equilibrium on its own. They also believe in the efficiency of markets and that wages and prices will adjust quickly to changing economic conditions. However, they do acknowledge that in the short run, the economy may experience fluctuations and unemployment, but they believe that these are temporary and will ultimately be corrected by market forces.

Classical Economists Argue That