Unlike the real world, the classical model with fixed output assumes that:
A) all factors of production are fully utilized.
B) all capital is fully utilized but some labor is unemployed.
C) all labor is fully employed but some capital lies idle.
D) some capital lies idle and some labor is unemployed.

Question

Quizplus · Accepted Answer

The classical model with fixed output assumes that all factors of production are fully utilized, therefore there is no unemployment of labor or idleness of capital.

Unlike the Real World, the Classical Model with Fixed Output