Which of the following is NOT an assumption of the classical system?
A. There is no money illusion.
B. People are motivated by self interest.
C. Pure competition exists.
D. Wages and prices are inflexible.
Answer: D
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Suppose inflation is expected to be 5 percent next year, and you and your employer agree to a 6 percent increase in your nominal, or monetary, wage. If inflation turns out to be 5%, what is your nominal wage increase?
The required reserve ratio is the minimum percentage of ________ that banks are required to hold by regulation
A) reserves as total assets B) deposits as total assets C) reserves as deposits D) deposits as reserves E) reserves as total liabilities
It has been claimed that foreign governments have attempted to influence votes in the U.S. that would promote policies of protectionism within the U.S
On the surface this appears to be totally illogical and counter intuitive, as this would presumably lessen the possibilities of foreigners' exports to the U.S.
A decrease in the interest rate will: a. increase the amount of money supplied by lenders
b. decrease the amount of money supplied by lenders. c. have no effect on the amount of money supplied by lenders. d. have an ambiguous effect on the amount of money supplied by lenders.