The Flaw of the Classical Model of the Business Cycle

question 138

Multiple Choice

The flaw of the Classical model of the business cycle is that it

• A)assumes away output fluctuations.
• B)assumes complete wage rigidity.
• C)assumes unrealistic fooling of workers.
• D)requires procyclical wage movements and continuous labor market equilibrium.

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Definitions:

Prevent Dumping

Strategies or policies implemented to protect a country's domestic industry by limiting the importation of cheaply priced foreign goods.

Foreign Licensing

A business practice where a company allows another business in a different country to produce and sell its products under its brand.

International Production

Creating goods in multiple countries around the globe, often to minimize costs or maximize quality.

Direct Exporting

Direct exporting refers to the process by which a company sells its products directly to buyers in a foreign market without intermediaries.