The most appropriate countercyclical policy, or stabilization policy, in times of unemployment, according to classical economists, is for the government to:
A)increase the minimum wage.
B)impose wage and price controls.
C)stimulate aggregate demand.
D)cut taxes.
E)do nothing.

Question

Quizplus · Accepted Answer

Classical economists believe that the economy is self-correcting and that any government intervention could lead to inefficiencies. Therefore, they advocate for a laissez-faire approach, suggesting that the government should do nothing and allow the market to adjust on its own.

The Most Appropriate Countercyclical Policy, or Stabilization Policy, in Times