Which statement best defines the classical perspective?
A)Aggregate supply determines aggregate demand.
B)Aggregate demand does not matter for anything.
C)Aggregate supply determines real variables such as output.
D)Aggregate demand determines all endogenous variables.

Question

Quizplus · Accepted Answer

The classical perspective emphasizes that aggregate supply, particularly the factors of production and technology, determine real variables such as output and that the economy will always tend towards full employment in the long run. It does not believe in government intervention to stimulate aggregate demand, as it views the market as self-correcting. Therefore, option C is the best choice as it correctly defines the classical perspective.

Which Statement Best Defines the Classical Perspective