An assumption of the classical model is that
A) money illusion is widespread.
B) people make decisions based on nominal prices rather than real prices.
C) prices are flexible while wages are inflexible.
D) people are motivated by self-interest.

Question

Quizplus · Accepted Answer

The classical model assumes that individuals act in their own self-interest, focusing on maximizing their utility or profits. This model posits that economic agents make rational decisions based on available information and their personal goals.

An Assumption of the Classical Model Is That