In the classical theory, one of the following is an important assumption:
A)Wages and prices are inflexible
B)There is full employment
C)Agents are price setters
D)Adjustment is through quantity.

Question

Quizplus · Accepted Answer

Classical theory assumes that the economy operates at or near full employment due to wage and price flexibility. This means that the labor market will adjust to ensure that anyone who wants to work at the prevailing wage rate can find employment.

In the Classical Theory, One of the Following Is an Important