According to the classical economists the economy ?
Correct answer: D. is self-correcting.
- A. requires fine tuning to reach full employment
- B. can never deviate from full employment
- C. will never be at full employment
- D. is self-correcting.
Explanation
Classical economists believed flexible wages and prices would restore equality between aggregate demand and supply, making the economy self-correcting toward full employment. Fine-tuning is associated with Keynesian policy rather than the classical view.
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