The classical theory of employment held that

A) total consumption would always equal total saving.
B) the savings of wealthy households would be borrowed and spent on consumer goods by poor households.
C) investment might either be less than,or greater than,saving.
D) the savings of households would all be borrowed and invested by businesses.

Classical Theory of Employment

An economic theory that posits that the economy naturally operates at a level of full employment due to the flexibility of prices and wages.

Total Consumption

The aggregate amount of goods and services consumed by individuals and entities in an economy.

Total Saving

The aggregate saving in an economy, comprising both private saving by households and public saving by the government.