With Respect to Unemployment, the Classical Model States That

question 113

Multiple Choice

With respect to unemployment, the classical model states that

• A) unemployment of any kind cannot exist.
• B) only voluntary unemployment exists.
• C) unemployment fluctuates with the interest rate.
• D) involuntary unemployment will always exceed voluntary unemployment.

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Definitions:

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.

Inferior Good

A category of products whose demand falls when consumer income rises, showing an inverse relationship with changes in income.

Giffen Good

A good for which an increase in the price raises the quantity demanded

Hunan

A province in south-central China, known for its spicy cuisine, rich cultural heritage, and historical significance.