According to Classical Theory

Multiple Choice

According to classical theory,

A) Keynes had "neglected to take account of the drag on prosperity which can be exercised by an insufficiency of effective demand."
B) Macro equilibrium might start out badly and get worse in the absence of government intervention.
C) Flexible wages and prices allow a laissez faire economy to adjust wages and prices to shifts in aggregate demand.
D) Business cycles are not relevant and do not occur.