AP Macroeconomics Question 75: Answer and Explanation
Use your browser's back button to return to your test results.
1. Classical economists generally believe that
I. wages fluctuate quickly
II. Say's law does not hold
III. input and output prices will stay in line with each other
IV. the government should not worry about maintaining aggregate demand at an adequate level
- A. II and IV only
- B. I, III, and IV only
- C. I and IV only
- D. II and III only
- E. I, II, and III only
Correct Answer: B
B Classical economists believe in Say's law. They also believe that wages and other input prices fluctuate quickly to stay in line with output prices. For both of these reasons, they feel that the economy is inherently stable and the government does not need to intervene in order to influence aggregate demand.