How did the neoclassical school view equilibrium?
A)As occurring at capacity output.
B)Where AS = LAS.
C)In a way that implied full employment.
D)As being a natural result of flexible prices and wages.
E)As occurring at capacity output,where AS = LAS,in a way that implied full employment and as being a natural result of flexible prices and wages.

Question

Quizplus · Accepted Answer

The neoclassical school viewed equilibrium as occurring at capacity output, where AS (Aggregate Supply) equals LAS (Long-Run Aggregate Supply), in a way that implied full employment, and as being a natural result of flexible prices and wages. This comprehensive view of equilibrium was a significant feature of the neoclassical school's macroeconomic analysis.

How Did the Neoclassical School View Equilibrium