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Eduncle posted an MCQ
March 02, 2020 • 17:33 pm 0 points
  • UGC NET
  • Economics

Given below are two statements – one is labelled as Assertion (A) and the other is labelled as Reason (R) : 

Assertion (A) : In classical model, investment demand is regarded as autonomous of change in income or employment
Reason (R) : It is wage price flexibility which brings full employment in the classical model 
In the light of the above two statements, choose the correct option : 

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    Eduncle Best Answer

    Under Classical Model, it is believed that there was always full employment in the economy. This argument is based on the assumption that there is a direct and proportional relation between money wages and real wages.

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