Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 1QP
To determine
Determine the classical view of wage, price and interest rate.
Expert Solution & Answer
Explanation of Solution
Classical view:
Classical economists consider that an economy is always in equilibrium at full employment level. Wage, price and interest rate are the factors will adjust the economy to achieve the equilibrium level, if a market has a flexible demand and supply.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
How do Classical economists and Keynesian economists differ in their perceptions of how well markets and prices function?
What is the classical economics position on (a) wages, (b)prices, and (c) interest rates?
Does the graph above reflect a Classical Model or a Keynesian Model? How do you know? What is happening in this economy in the short run?
Chapter 9 Solutions
Macroeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2STCh. 9.3 - Prob. 3STCh. 9 - Prob. 1QP
Ch. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 16QPCh. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - Prob. 3WNGCh. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNG
Knowledge Booster
Similar questions
- What are the major policy conclusions of classical economics? Explain how these policy conclusions follow from the key assumptions of the classical theoretical system.arrow_forwardWhat is the Neoclassical Economics view of labor markets. How do they function? Does the economy produce full employment? How? If not, why?arrow_forward"In the classical model, the equilibrium level of real Gross Domestic Product (GDP) is completely supply-determined." Do you agree or disagree? Why?arrow_forward
- Explain what are the differences between classical economist and Keynesian economist point of view?arrow_forwardPer the classical economists, if the quantity of money that people wanted to save was greater than the amount that people wanted to invest, the interest rate would fall. True or Falsearrow_forwardWhat happens when firms and workers underestimate future prices in the economy? Focus your answer on what would happen to actual output as opposed to the expected potential output. (Course is macroeconomics).arrow_forward
- According to the classical perspective (the one from the 19th century that I described at the beginning of my first lecture video), what kinds of things could cause recessions or other economic downturns?arrow_forwardwhat is the key difference between classical economic and Pre-classical economics?arrow_forwardWho is John Maynard Keynes? What time period did he write? What did he believe about the market’s ability to recover from a recession?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning