The classical model assumes that
A. people have money illusion.
B. wages and prices are flexible.
C. wages are flexible but prices are not.
D. imperfect competition predominates in most markets.
Answer: B
You might also like to view...
The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour, assuming there are no other variable costs, then the average variable cost of selling books will reach its minimum at
A) 58 books sold per hour. B) 59 books sold per hour. C) 73 books sold per hour. D) 83 books sold per hour.
"Economists have generally come to agree that monetary policy is better suited than fiscal policy for controlling GDP" because
A) money is neutral and therefore changes affect real income but not prices. B) fiscal spending and tax changes affect the economy less than changes in the money supply. C) the Fed can make decisions quickly, Congress and the President more slowly. D) Congress can make decisions quickly, the Fed more slowly.