According to classical macroeconomic theory,
A)output is determined by the supplies of capital and labor and the available production technology.
B)for any given level of output,the interest rate adjusts to balance the supply of,and demand for,loanable funds.
C)given output and the interest rate,the price level adjusts to balance the supply of,and demand for,money.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Classical macroeconomic theory suggests that output is determined by the supplies of capital and labor and the available production technology, and that for any given level of output, the interest rate adjusts to balance the supply of, and demand for, loanable funds. Additionally, given output and the interest rate, the price level adjusts to balance the supply of, and demand for, money. Therefore, all of the above choices are correct according to classical macroeconomic theory.

According to Classical Macroeconomic Theory