Question
Macroeconomics Question on Inflation and unemployment
Which of the following is NOT a postulate of the Classical Model of full-employment equilibrium?
A
Wage-Price flexibility
B
Perfect information about the market
C
Consumption and saving functions depend on income.
D
The price level moves proportionately with the quantity of money.
Answer
Consumption and saving functions depend on income.
Explanation
Solution
The correct option is (C): Consumption and saving functions depend on income.