In the classical model,
A) unemployment will never exist since workers will be willing to accept lower wages and will then be able to find work.
B) unemployment will never exist because employers will be willing to pay the wage rate demanded by the workers.
C) wages will go up but never go down.
D) full employment will never be reached.

Question

Quizplus · Accepted Answer

In the classical model, it is assumed that markets, including labor markets, are flexible. Unemployment is believed to be temporary as workers are willing to accept lower wages to find work, leading to an equilibrium where all who want to work at the market wage can find employment.

In the Classical Model