Circular Flow Model and Classical Theory Quiz

<p>The return on savings or cost of debt in terms of purchasing power</p> Signup and view all the answers

<p>The return on savings or cost of debt in terms of purchasing power</p> Signup and view all the answers

<p>The interest rate, the model, applications, and case study</p> Signup and view all the answers

<p>The nominal interest rate represents the nominal return on savings or nominal cost of debt in terms of percentage</p> Signup and view all the answers

<p>The real interest rate represents the real return on savings or real cost of debt in terms of percentage, i.e. the return on savings or cost of debt in terms of purchasing power</p> Signup and view all the answers

<p>The focus of the classical theory in a closed economy in the long run is on equilibrating forces in the goods market</p> Signup and view all the answers

<p>In the long run, the exogenous variable is the level of income (Y)</p> Signup and view all the answers