Which of the following statements about the classical school of economics is FALSE?
A) It dates back to Adam Smith and his book, The Wealth of Nations.
B) Its followers hold that government intervention is necessary to keep the economy at full employment.
C) It was largely rejected during the 1930s because it could not explain or remedy the Great Depression.
D) Its followers hold that everything leaked from the spending stream through saving is returned through investment spending.

Question

Quizplus · Accepted Answer

Classical economics typically argues for a limited role of government, suggesting that markets are best left to regulate themselves. The statement that its followers believe government intervention is necessary to maintain full employment contradicts this principle, as classical economists generally believe that the economy is self-regulating and will naturally return to full employment.

Which of the Following Statements About the Classical School of Economics