Question

"According to classical macroeconomic theory,"

Answer 1

According to classical macroeconomic theory , all the given options suits it.

All of the above are correct.

Explanation:

Classical macroeconomic theory is based on the classical theory in which the emphasis is mostly on the supply chain rather than the demand. In this theory, the price levels always move slowly or are sticky in the short run as compared to the old run.

In this theory, the capital, labor, and the available production supplies determines the output and for reaching to any output, demand for money and supply is adjusted by the interest rate.