According to classical theory, total employment and real Gross Domestic Product (GDP) are
A) unrelated.
B) positively related.
C) inversely related.
D) negatively related.

Question

Quizplus · Accepted Answer

According to classical theory, total employment and real Gross Domestic Product (GDP) are positively related. Classical economists believe that the economy will always move towards its natural level of employment, which is when all resources are fully employed, and this level of employment will result in maximum production capacity and real GDP. Therefore, as total employment increases, real GDP increases as well.

According to Classical Theory, Total Employment and Real Gross Domestic