The Classical Model Is a Poor Predictor of Short-Run Economic

question 53

Multiple Choice

The classical model is a poor predictor of short-run economic fluctuations in part because it assumes that

• A) all workers wish to work
• B) government will prevent these fluctuations
• C) the labor market always clears
• D) the long run is just a series of short-run periods
• E) labor demand curve is stable

---

Definitions:

Managerial Efficiency

Refers to the effectiveness with which managers utilize resources to achieve an organization's objectives and optimize operations.

Investment Turnover

A ratio that measures the efficiency of a company in generating sales from its investments in assets.

Assets

The resources owned by a business.

Residual Income

The amount of income that an individual or company has after all personal debts and expenses, including a mortgage, have been paid.