Asked by Zachary Siegel on May 25, 2024
Verified
The classical economists believed that recessions
A) needed to be fought with monetary and fiscal policy.
B) would probably develop into depressions.
C) develop into inflations.
D) would cure themselves.
Fiscal Policy
Manipulation of the federal budget to attain price stability, relatively full employment, and a satisfactory rate of economic growth.
Recessions
Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
- Absorb the knowledge of multiple schools of economic thought and their notable advocates.
- Analyze the implications of economic theories on fiscal and monetary policy.
Verified Answer
WW
William WeisslingerMay 25, 2024
Final Answer :
D
Explanation :
The classical economists believed in the concept of the "invisible hand" and the self-correcting nature of the market. They believed that a recession would eventually reach a natural equilibrium and return to full employment without any government intervention. Therefore, their answer would be D) would cure themselves.
Learning Objectives
- Absorb the knowledge of multiple schools of economic thought and their notable advocates.
- Analyze the implications of economic theories on fiscal and monetary policy.
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