A basic feature of the classical system of self-regulating markets was that

Question

Quizplus · Accepted Answer

The classical system believed that flexible wages and prices would eliminate unemployment and overproduction. As wage rates decreased, more firms would hire workers, and as prices decreased, more consumers would buy goods, leading to a balance between supply and demand. This was believed to be a self-regulating mechanism that would ensure the economy would always return to equilibrium.

A Basic Feature of the Classical System of Self-Regulating Markets