He market clearing assumption is A. a central assumption of the short-run macro model B. the idea that prices in every market will adjust until quantity supplied and quantity demanded are equal C. the idea that excess supply always leads to an increase in demand D. the idea that markets only work when they are in equilibrium E. believed by most economists today to be an unreasonable assumptio

B : the idea that prices in the everymarket will adjust until quantity supplied and quantity demanded are equal.

Explanation:

market clearing means that quantity supplied and quantity demanded will equal and there will be equilibrium at the market.

B) the idea that prices in every market will adjust until quantity supplied and quantity demanded are equal

Explanation:

Classical economists believe in the market clearing assumption, which states that there cannot exist any excess supply of any good or service because the demand will always equal. The adjustment tool in order for the demand to equal the supply is equilibrium price. Equilibrium price should adjust immediately so that both the demand and the supply of goods and services are always equal.

The problem with this and most of classical economic theories is that they are great in theory, but they are never true in the real world. Classical economics is full of great but non-practical concepts. For instance, if this was true, no excess food would be wasted in the world, and over 30% of the world's total production of food just rots. This is not a concept that applies everywhere except in the US or other rich countries, this concept doesn't apply anywhere.

Things should work this way, but they don't. Everywhere you have either excess supply or excess demand, and prices do not adjust immediately, they are actually very sticky. This doesn't even work with stocks, because many times the price of stocks is not determined by real concrete factors, instead it is determined by expectations, similar to every other good or service that exists.

answer; the correct answer is (direct foreign investment);