The Assumption That Labor Markets Clear Makes It Very Easy

question 28

True/False

The assumption that labor markets clear makes it very easy for the classical model to explain expansions.

---

Definitions:

M3

A measure of the money supply that includes M2 plus large time deposits, institutional money market funds, and other large liquid assets.

Money Supply

The broad total of financial assets available in an economy at a specified moment.

Gold

A precious metal used as an investment, a currency hedge, and in various industrial applications, valued for its rarity and physical properties.

Silver

A precious metal used for investment, industrial applications, and jewelry, valued both for its monetary and physical properties.