Which of the following statements is correct? I. If other factors are held constant, the level of employment in the economy determines real Gross Domestic Product (GDP).
II) According to classical economists, only voluntary unemployment exists in the long run.
A) I only
B) II only
C) Both I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

Statement I is correct because employment levels directly affect the production of goods and services, thus influencing real GDP. Statement II is correct as classical economists believe that in the long run, the economy reaches full employment, and any unemployment is voluntary.

Which of the Following Statements Is Correct? I