Which of the following is necessary for an economy to self-adjust fairly quickly,according to classical economists?
A) The use of monetary policy
B) Flexible wages and prices
C) The use of fiscal policy
D) A high unemployment rate

Question

Quizplus · Accepted Answer

According to classical economists, flexible wages and prices are necessary for an economy to self-adjust fairly quickly. This means that wages and prices should be able to easily adjust to changes in supply and demand without any government intervention or manipulation. This allows the market to remain efficient and competitive, leading to a quicker recovery from economic shocks. Monetary policy and fiscal policy may be used to address specific issues, but they are not considered necessary for an economy to self-adjust quickly according to classical economic theory. A high unemployment rate is generally seen as a negative indicator of economic health and not necessary for self-adjustment.

Which of the Following Is Necessary for an Economy to Self-Adjust