Which of the Following Is NOT an Assumption of the Classical

question 117

Multiple Choice

Which of the following is NOT an assumption of the classical model?

• A)Pure competition exists.
• B)Wages and prices are flexible.
• C)Government spending is necessary to achieve economic stability.
• D)People are motivated by self-interest.

---

Definitions:

Mutually Exclusive

Situations or events that cannot occur at the same time, requiring a choice to be made.

Straight-Line Depreciation

A template for apportioning the cost of a solid asset throughout its active life in equal yearly parts.

Payback Period

The duration it takes for an investment to return its original cost to the investor.

NPV

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project by discounting all expected future cash flows back to their present value.