Classical economists argue thata. the government should activelyintervene in the economy toeliminate business cycles.b. wages and prices don't adjustquickly, so the economy is slow toreturn to equilibrium.C. government policies will beineffective and counterproductive.d. the government should have anactive role in the economy.

Answered: C. government policies will be…

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C. government policies will be ineffective and counterproductive.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

ChapterD: The Expenditure-output Model

Section: Chapter Questions

Problem 25CTQ: Exercise D25 What role does government play in stabilizing the economy and what are the tradeoffs...

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Question

Classical economists argue that
a. the government should actively
intervene in the economy to
eliminate business cycles.
b. wages and prices don't adjust
quickly, so the economy is slow to
return to equilibrium.
C. government policies will be
ineffective and counterproductive.
d. the government should have an
active role in the economy.

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