One tenet of classical economics is that
A) the role of the government should be limited, since the market will always be self-correcting.
B) the government should intervene whenever necessary to avoid any unemployment.
C) wages and prices are "sticky downward."
D) the government should set a minimum wage slightly above the natural market equilibrium rate.

Question

Quizplus · Accepted Answer

Classical economics emphasizes the importance of the free market and believes that the market will correct itself in the long run. Therefore, the role of the government should be limited to ensuring property rights, enforcing contracts, and maintaining a stable monetary policy. The other options do not reflect the principles of classical economics.

One Tenet of Classical Economics Is That