According to the classical model, the income generated by production is
A) enough to meet the needs of everyone in society.
B) enough to purchase all the goods and services produced.
C) fully spent on savings.
D) always insufficient to purchase all the goods and services produced.

Question

Quizplus · Accepted Answer

The classical model assumes that the income generated by production is fully spent on purchasing all the goods and services produced, leading to a state of equilibrium where there is no unemployment or inflation. Therefore, option B is the correct choice. Options A, C, and D are incorrect as they are not consistent with the assumptions of the classical model.

According to the Classical Model, the Income Generated by Production