According to classical macroeconomic theory,

A) aggregate supply automatically adjusts to shifts in aggregate demand.
B) demand creates its own supply.
C) flexible prices,wages,and interest rates assure full-employment equilibrium.
D) desired investment typically exceeds desired saving.

Classical Macroeconomic Theory

Classical macroeconomic theory is an economic framework that emphasizes the importance of free markets, suggesting economies are self-regulating systems that automatically adjust to achieve full employment.

Aggregate Supply

The total supply of goods and services available to a particular market from producers at different price levels in a given period.

Aggregate Demand

The total requisition of goods and services in an economic setting, valued at a consistent price level and for a particular duration.