Asked by Parker Murdie on May 03, 2024
Verified
Classical economists believed that the economy automatically moves toward equilibrium at full employment.
Classical Economists
A group of economists in the late 18th and early 19th centuries who believed in the idea of self-regulating markets, emphasizing free competition and minimal government intervention.
Full Employment
A state in an economy where all existing labor forces are deployed in the utmost efficient manner.
Equilibrium
A state in economics where supply equals demand, leading to a stable situation where there is no inherent tendency for change.
- Understand the influence of governmental fiscal policy on the balance of the economy and the attainment of full employment, as interpreted by various economic models.
Verified Answer
NP
NAKYRA PROPHET SMITHMay 05, 2024
Final Answer :
True
Explanation :
Classical economists subscribed to the concept of Say's Law, which holds that supply creates its own demand and the market will naturally clear itself. This meant that any deviations from full employment would be temporary and the economy would naturally return to equilibrium without the need for government intervention.
Learning Objectives
- Understand the influence of governmental fiscal policy on the balance of the economy and the attainment of full employment, as interpreted by various economic models.