In the classical model, the loanable funds market will clear when saving

Consumers' preferences are represented by

A) budget lines. B) indifference curves. C) relative prices. D) household income.

Which of the following is NOT an argument of non-activists?

A) private spending may show some instability but monetary or fiscal policy designed to stabilize it will just make things worse B) private spending is stable partly because consumption spending is based on permanent income C) even if prices are not completely flexible in the short-run, given time there is enough flexibility for the system to return to the natural level of real GNP D) it is true that monetary and fiscal policy have destabilizing in the past, but economic knowledge is now advanced enough to permit effective countercyclical policy