Question

2. According to classical economists, equilibrium can be
derived by
A) Flexible prices of goods and services
1
B) Flexible wage rate
C) Both A and B D) None of the above​

Answer 1

$\huge\underline\frak{\fbox{AnSwEr:-}}$

When employment of the economy's resources falls below the full employment level, the equilibrium level of real GDP also falls below its natural level. ... Aggregate saving, represented by the curve S, is an upward‐sloping function of the interest rate; as the interest rate rises, the economy tends to save more.

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