Question

Question 20.
Which of the following is true for Classical Theory of Employment?
Answer:
State of full employment in the economy
No possibility of over-or under-production in the economy
Both (a) and (b
None of the above

Answer 1

Answer:

Opinion A is your answer OK bye

Answer 2

Statement 1 i.e. State of full employment in the economy is  true for Classical Theory of Employment:

It is basic assumption of classical theory that in the long run there is a situation of full employment without inflation in the economy.

As far as statement 2 is concerned i.e. No possibility of over-or under-production in the economy, then the theory suggests that there is a possibility of overproduction in short run. However, in the long run the possibility gets corrected as the producer produces less.