Which of the Following Assumptions of the Classical Model Is

question 34

Multiple Choice

Which of the following assumptions of the classical model is the best reason we cannot use it to explain short-run economic fluctuations?

• A) Markets never clear in the long run.
• B) The labor market clears.
• C) Prices remain constant and supply and demand adjust.
• D) It does not show how an economy recovers from a recession.
• E) Government intervention is essential to get markets to clear.

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