The classical model makes little distinction between the long run and short run because
A) the model has not been fully developed yet.
B) the classical economists knew that we are always operating in the short run.
C) current changes influence the long run, so it is not possible to plan for the future.
D) wages and prices adjust so fast that the economy is quickly moving towards the long run.

Question

Quizplus · Accepted Answer

The classical model assumes that wages and prices adjust quickly to changes in the economy, leading to a relatively rapid movement towards the long-run equilibrium. Therefore, there is little distinction between the short run and long run in the classical model.

The Classical Model Makes Little Distinction Between the Long Run