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According to classical economists, there always exists ______ equilibrium in the economy.
Full employment
Underemployment
Over full employment
None of these
- Option 1: Full employment
- This is the classical view. They believe that free markets naturally adjust to ensure all available resources are used efficiently.
- The labor market clears, meaning everyone willing to work at current wages can find a job.
- This option aligns with classical economic theory.
- Option 2: Underemployment
- Underemployment means workers are employed at less than full capacity, which contradicts classical views.
- Classical economists believe in self-correcting markets, so they would dismiss this as a permanent state.
- Option 3: Over full employment
- This would suggest more jobs than workers, leading to unsustainable economic conditions.
- It's not a typical scenario addressed by classical economics.
- Option 4: None of these
- Classical economists emphasize natural, self-adjusting markets, typically dismissing sustained imbalances.
By: santosh ProfileResourcesReport error
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