4. Classical economists thought that wages and prices would adjust so as to eliminate any temporary unemployment

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4. Classical economists thought that wages and prices would adjust so as to eliminate any temporary unemployment in a market economy. The Great Depression caused economists to question this hypothesis. Today, most economists believe that cyclical economic behavior results from fluctuations in either

(a) private investment or

(b) the supply of money.

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Economics Private And Public Choice

ISBN: 9780123110404

2nd Edition

Authors: James D Gwartney; Richard Stroup; A H Studenmund

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