1. Classical macroeconomic theory believed that if total spending was less than the amountnecessary to establish full-employment, then:

a. the government should use certain policies to bring the economy back to full employment.

b. product and resource prices would fall, restoring full-employment

c. product prices would rise, resulting in an increase in supply and a return to full employment

d. product prices would fall, but resource prices would rise, restoring full employment.

2.Keynesian economics would best be described by which statement?

a. capitalism is not a self-correcting economic system.

b. saving(s) is the driving force behind economic growth.

c. Keynesian economics is basically modern-day Marxism

d. supply creates its own demand.