Which of the following supports the classical theory of employment?
A. The interest rate will not always equalize savings and investment.
B. Not everything produced will necessarily be purchased.
C. Saving and investing are done by different people for different reasons.
D. Wages and prices are flexible downwards.
D. Wages and prices are flexible downwards.
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An increase in the time spent on job search
A) decreases the unemployment rate. B) decreases the real wage rate. C) decreases the labor force participation rate. D) decreases potential GDP. E) decreases the demand for labor.
Suppose that the supply curve remains unchanged. If the demand curve shifts to the right
A) the market clearing price definitely will decrease. B) the market clearing price definitely will increase. C) there will be no change in the market clearing price. D) the market will collapse.