The hands-off view of the classical school rests on which of the following two simple propositions about markets?
A) Demand creates its own supply and markets are basically competitive.
B) Competitive markets are efficient and both prices and nominal wages are flexible.
C) Market failure occurs and prices are rigid.
D) Wages are sticky downwards and market failure is inevitable.

Question

Quizplus · Accepted Answer

The classical school believes that competitive markets are efficient and that both prices and nominal wages are flexible, allowing the economy to self-correct without government intervention.

The Hands-Off View of the Classical School Rests on Which