According to the classical economists, an economy producing $10 million in goods and services
A) may be producing too much since the needs of people may not be this great.
B) simultaneously generates the income necessary to purchase $10 million in goods and services.
C) is supplying $10 million in goods and services, but could be demanding more or less than $10 million in goods and services for a very long period of time.
D) could experience a permanent surplus if no one has estimated the demand for goods and services in the economy.

Question

Quizplus · Accepted Answer

According to classical economists, production generates an equivalent amount of income, so an economy producing $10 million in goods and services simultaneously generates $10 million in income necessary to purchase those goods and services. Therefore, choice B is correct. The other choices are incorrect because they do not accurately reflect classical economic theory.

According to the Classical Economists, an Economy Producing $10 Million