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Unemployment does not exist in the classical model because ________. Updated versions of the classical model that allow for unemployment can only explain fluctuations in

Unemployment does not exist in the classical model because ________. Updated versions of the classical model that allow for unemployment can only explain fluctuations in ________.

A) the classical model assumes that the full-employment is determined by the effective labor demand curve; the cyclical rate of unemployment.

B) the classical model assumes that the full-employment is determined by the effective labor demand curve; the natural rate of unemployment.

C) the classical model assumes that the labor market is always in equilibrium; cyclical unemployment.

D) the classical model assumes that the labor market is always in equilibrium; frictional unemployment.


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