Quiz 6 Flashcards Preview

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Flashcards in Quiz 6 Deck (10):
1

Classical economists believe people make employment decisions based on their ______ wage.

real

2

The Classical word for equilibrium is:

natural

3

Say's Law says that income is created by sales, regardless of the time difference between production and sale of a good.

False

4

The classical word for recession is:

glut

5

For Classical economics to work, wages must be completely flexible, both up and down.

True

6

In Classical economics, savings always equal investment.

True

7

In the Classical world, interest rates are determined by:

savings and investment

8

In the Classical world, inflation is caused by:

too much money in the economy

9

Classical economics was the dominant theory in economics from Adam Smith until:

the Great Depression

10

Classical economists argue the Great Depression happened because prices and wages stayed high and did not fall much after the depression started.

False