Regarding unemployment, the classical model implies that
A) unemployment always exists.
B) unemployment cannot exist.
C) voluntary unemployment is zero, but involuntary unemployment often is fairly high.
D) only voluntary unemployment exists.

Question

Quizplus · Accepted Answer

The classical model posits that all unemployment is voluntary, as it assumes that wages are flexible and will adjust to clear the labor market, meaning anyone who wants a job at the market wage can find one. Involuntary unemployment, where individuals are willing to work at the current wage but cannot find employment, does not exist in this model.

Regarding Unemployment, the Classical Model Implies That