classical employment theory
Few questions of the economy (macroeconomics)?
1) According to the classical theory of interest rates, which of the following increase the equilibrium interest rate? A) A decrease in saving b) a decrease in investments c) A decrease in the demand for money d) The increase in the demand for money I think D is the one who makes sense here. 2) In the classical system, the total output of goods and services and total employment are determined all of the following, except rate) of interest. B) the supply of capital. C) the work force. d) existing technology. I think it might be A or B here. 3) Which of the following guarantees full employment in the classical model? a) Constant b) The exchange rate equation c) wages and flexibility price d) adjustment of inventory I'm pretty sure it's C-here. thanks for any help.
1) d Yes you are right, its the only one that causes an increase in the price of money, ie interest rates, 2) an interest rate affects the demand for money, not the production of goods and services. its capital, because there is no need capital to produce goods and services in the first place, 3) c yeh is right again, none of the other answers have much to do with the achievement of full employment.
John Maynard Keynes’ Theory of Employment-Etc. – Chapter 2.2 Classical Postulates’ Conditionality
