The classical view of the labor market is basically consistent with the assumption of _________ aggregate supply curve?
Correct answer: A. a vertical (or almost vertical)
- A. a vertical (or almost vertical)
- B. a downward sloping
- C. a horizontal (or almost horizontal)
- D. an upward sloping
Explanation
The classical model assumes wages and prices adjust so the economy operates at potential output, making aggregate supply vertical or nearly vertical. Changes in demand mainly change prices rather than real output in this view.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
According to the classical economists, those who are not working ?
Potential GDP is the level of aggregate output ?
The Phillips curve indicates that there is a ?
Possible causes of involuntary unemployment are ?
An advocate of the classical model of the economy would claim that unemployment is created when the ____ is above its equilibrium level in the ______?
The costs of inflation are ?