The Classical model
A) is now discredited
B) was developed by John Maynard Keynes
C) has been completely displaced by the short-run macro model
D) helps us to understand the performance of the economy in the long run
E) is most useful in helping us to predict when an economic downturn will occur

Question

Quizplus · Accepted Answer

The Classical model helps us to understand the performance of the economy in the long run. It suggests that in the long run, markets will efficiently allocate resources, and the economy will tend towards full employment and potential output. The model emphasizes the importance of factors such as technology, productivity, and the supply of resources in determining the long-run performance of the economy.

The Classical Model