Q22. Classical economists believed that a. the market system always operated at
ID: 1213200 • Letter: Q
Question
Q22. Classical economists believed that
a. the market system always operated at a position of full employment
b. occasional problems of unemployment could occur but would be quickly eliminated by the system of self-regulating markets
c. the price level would adjust to balance planned saving with planned investment
d. the economy had several possible equilibrium output levels
Q23. The size of planned consumption is influenced to a considerable extent by
a. the interest rate
b. whether or not the government is running a deficit
c. how much income people are receiving
d. expected profits
Q24. Say's Law states that
a. supply is greater than demand
b. supply is less than demand
c. demand generates supply
d. supply generates demand
Q25. According to the classical approach, if planned savings increases,
a. the rate of interest will rise
b. the rate of interest will fall
c. planned investment will fall
d. planned consumption will increase
Q26. COLA clauses are usually based on the
a. CPI
b. PPI
c. implicit price deflators
d. level of unemployment
Explanation / Answer
a. Classical economists believed that-. the market system always operated at a position of full employment
, occasional problems of unemployment could occur but would be quickly eliminated by the system of self-regulating markets.
23. The size of planned consumption is influenced to a considerable extent by how much income people are recieving as consumption depends on marginal propensity to consume out of income.
24., says law states that supply generates demand.
25. According to the classical approach, if planned savings increases,rate of interest will reduce, giving an incentive to people to invest more and save less.
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