Consider the following statement: \" If the government attempts to raise employm

Question

Consider the following statement: " If the government attempts to raise employment through increased fiscal spending, all it will end up doing will be to drive up the price level." The proponent of this statement assumes that The AS curve is a vertical line The AS curve is upward-sloping The AS curve is downward-sloping The AS curve is flat Which theories of the economy lead to the assertion that markets " self-adjust" to deviations from potential GDP ? Keynesian theories Monetarist theories Classical theories Supply -side theories

Explanation / Answer

28 Answer B

29 answer c

Classical economics: the economy “self-adjusts” to any deviations from its long-term growth trend.

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