The Classical assumption that prices adjust rapidly to eliminate gaps between quantities demanded and quantities supplied means
A) that businesses find inventories of unsold goods piling up.
B) that unemployment exists at the equilibrium wage in the labor market.
C) that no businesses find inventories of unsold goods piling up.
D) that businesses find increasing delays in receiving goods ordered from suppliers.

Question

Quizplus · Accepted Answer

The classical assumption implies that markets are efficient and adjust quickly to changes in supply and demand, preventing significant unsold inventories from accumulating.

The Classical Assumption That Prices Adjust Rapidly to Eliminate Gaps