According to the classical model
A) long-term unemployment is unavoidable.
B) unemployment is a temporary phenomenon.
C) unemployment only exists during periods of war.
D) the natural rate of unemployment is zero.

Question

Quizplus · Accepted Answer

According to the classical model, unemployment is a temporary phenomenon and will eventually return to the natural rate of unemployment, which is not zero but reflects frictional and structural factors in the labor market. The classical model does not necessarily predict long-term unemployment, nor does it tie unemployment to periods of war.

According to the Classical Model