Question: Unemployment does not exist in the classical model because ________. Updated versions of the classical model that allow for unemployment can only explain fluctuations in
Unemployment does not exist in the classical model because ________. Updated versions of the classical model that allow for unemployment can only explain fluctuations in ________.
A) the classical model assumes that the full-employment is determined by the effective labor demand curve; the cyclical rate of unemployment.
B) the classical model assumes that the full-employment is determined by the effective labor demand curve; the natural rate of unemployment.
C) the classical model assumes that the labor market is always in equilibrium; cyclical unemployment.
D) the classical model assumes that the labor market is always in equilibrium; frictional unemployment.
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