Economics · Classical Theory of Employment
The classical theory of employment is based on the fundamental assumption that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Government intervention is necessary to maintain economic balance.
- 2The labor market always clears through wage-price flexibility.✓
- 3Deficiency in aggregate demand is the primary cause of unemployment.
- 4Unemployment in the long run is mostly involuntary.
Correct answer
The labor market always clears through wage-price flexibility.
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