The classical economists assumed that
A) monopoly was widespread in the economy.
B) government intervention in the economic system was necessary and helpful.
C) wages and prices were sticky in going downward.
D) wages and prices were flexible.

Question

Quizplus · Accepted Answer

The classical economists believed that wages and prices were flexible and would adjust to changes in supply and demand without the need for government intervention. They believed that a free market economy would naturally reach an equilibrium where supply and demand were balanced and resources were allocated efficiently. They did not see monopoly as a widespread problem, and in fact, believed that competition was a necessary component of a healthy economy. They also believed that wages and prices were not sticky in going downward, meaning that they could adjust quickly in response to changes in market conditions.

The Classical Economists Assumed That