Chapter 9: Classical Macroeconomics and the Self-Regulating Economy: Pre-Class E. lnillass Activities Packet NamelIJJ. Number: Section: Date: Part 3. Discussion Questions and Problems 1. What is the classical economics position with respect to [a]: wages. [b]: prices, and [ct interest rates\";I leccording to classical economists, does Say's Law hold in a money economy? Explain your answer. 3. How do you explain why inyestment falls as the interest rate rises? 4. Explain why saying rises as the interest rate rises. 5. According to classical economists, does an increase in saying shift the At] more to the lett? Explain your answer. 6. What does it mean to say that the economy is in a recessionary gap? In an inflationary gap? In long-mo equilibrium? F. What Is the state ofthe labor market In {at a recessionary gap: {bi an inflationary gap: {c1 long-run equilibrium: 3. Describe the relationship ofthe [actual] unemployment rate to the natural unemployment rate in each of the following economic states: {at a recessionary gap: {bi an inflationary gap: {c1 long-run equilibrium; 9. Explain MW the economy can operate beyond its institutional PPF but not beyond its physical PPF. 1|]. What is a Laissez-iaire economic system