According to classical macroeconomic theory:
A) output is determined by the level of aggregate demand
B) the price level is, in the long run, relatively unresponsive to changes in aggregate demand
C) the interest rate adjusts to balance the supply and demand for loanable funds
D) none of the above
E) all of the above

Question

Quizplus · Accepted Answer

Classical macroeconomic theory posits that the interest rate adjusts to balance the supply and demand for loanable funds, while output is determined by factors like technology and resources, not aggregate demand.

According to Classical Macroeconomic Theory