If the rate of interest did not equate saving and investment and total output was greater than total spending,the classical economist argued,competition would tend to force

Question

Quizplus · Accepted Answer

According to classical economists, if the rate of interest did not equate saving and investment and total output was greater than total spending, there would be a surplus of goods and services in the market. This surplus would force producers to lower their product prices in order to compete for consumers. As a result, resource prices would also have to be lowered to maintain profitability. Therefore, the correct answer is A) product and resource prices down.

If the Rate of Interest Did Not Equate Saving and Investment