Consider the following statements in respect of assumptions of classical theory of employment and state…
Statements a, b and d describe the standard classical model of employment. Its simplified framework assumes full employment without inflation, a closed economy, and perfect…
Choose your answer
Consider the following statements in respect of assumptions of classical theory of employment and state which are correct:
a) There is the existence of full employment without inflation
b) It is closed economy without foreign trade
c) Labour is heterogeneous
d) There is perfect competition in labour and product markets
Answer and explanation
Correct answer D
Statements a, b and d describe the standard classical model of employment. Its simplified framework assumes full employment without inflation, a closed economy, and perfect competition in labour and product markets. Labour is treated as homogeneous rather than heterogeneous, so c is false.
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Karnataka SET (KSET)