Question

Which of the following statements would a classical economist agree with? A) savings is a drain...

Which of the following statements would a classical economist agree with?

A) savings is a drain on demand

B) sticky prices prevent the economy from reaching equilibrium

C) government knows best how to allocate investment funds

D) big government tends to slow down economic growth

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Answer #1

Classical economist would agree with the (D) big government tends to slow down economic growth

Classical economists believes in the concept of laissez faire which means that an economy should be free of government intervention.They believe that the markets should be free and regulate themselves if they are left alone and does not need any interference from the government.They dislike government spending and states that government intervention causes various problems such as unemployment and slows down economic growth in the long-run.

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