The old classical macroeconomic was based on an assumption of price and wage ________,and thus an economy that ________.
A)flexibility,promptly self-corrected
B)flexibility,failed to self-correct promptly
C)stickiness,promptly self-corrected
D)stickiness,failed to self-correct promptly

Question

Quizplus · Accepted Answer

The old classical macroeconomic theory assumed price and wage flexibility, which meant that the economy could self-correct promptly in response to economic disturbances. This flexibility allowed for adjustments in prices and wages to restore equilibrium without the need for government intervention.

The Old Classical Macroeconomic Was Based on an Assumption of Price