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    Question

    Which of the following is NOT a postulate of the

    Classical Model of full-employment equilibrium?
    A Wage-Price flexibility Correct Answer Incorrect Answer
    B Perfect information about the market Correct Answer Incorrect Answer
    C Consumption and saving functions depend on income Correct Answer Incorrect Answer
    D The price level moves proportionately with the quantity of money. Correct Answer Incorrect Answer

    Solution

    While this is true in general economics, it is not a specific postulate of the Classical Model of full-employment equilibrium. The Classical Model focuses more on the flexibility of wages and prices, perfect information, and the role of money rather than the explicit dependency of consumption and saving on income.

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