Which of the following is not an assumption of Schumpeter's stationary state ?
Correct answer: B. An economy below full employment
- A. Perfect competition
- B. An economy below full employment
- C. No savings or technical change
- D. No entrepreneurial function is required
Explanation
Schumpeter's stationary state is a circular-flow economy with no technical change, savings or entrepreneurial function, generally based on full employment assumptions. An economy below full employment is therefore not part of the stationary-state assumptions.
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