In the Classical system, the total output of goods and services and total employment are determined by all of the following except
A) the interest rate.
B) the labor force.
C) the supply of capital.
D) existing technology.

Question

Quizplus · Accepted Answer

In the Classical system, the interest rate does not determine the total output of goods and services and total employment. The Classical system focuses on the factors of production: labor, capital, and technology, which determine the productive capacity of the economy. The interest rate may affect the allocation of resources, but it is not a determiner of the total output and employment in the Classical model.

In the Classical System, the Total Output of Goods and Services