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

Question

Quizplus · Accepted Answer

In the classical model with fixed output, it is assumed that both capital and labour are fully utilized, meaning there is no unemployment of resources.

Unlike the Real World, the Classical Model with Fixed Output