o low that they can be assumed to be negligible. So, consumers, producers and workers know the prices and wages existing among traders in the markets and aware of their options and new products which recently entered the market. No one would be privy to some special information providing them with an advantage for long.
              Full employment: As a result of the above assumptions, a prediction of the classical system is that is essentially operates at full employment on a long-run equilibrium path over time. While in the short run unemployment can result, it can't exist permanently because wage rates fall when there is excess supply of labor. As workers compete for jobs,then by the law of demand wage rates fall and the quantity of labor services hired by firms increases. Alternately, if there were a labor shortage, the wage rate would rise as firms compete for workers. The classical model incorporates the notion that the economy is on a long-run moving equilibrium path, and any deviations from long run equilibrium are nor permanent because wage and price flexibility can remove excess demands or excess supplies.
             Let us summarise the assumptions we made above:
             The equilibrium real wage defines full employment of the labor force, and full employment of the labor force ( with a given production function ) defines the full employment level of output. Classical theory found no obstacle to the attainment of these positions as long as the money wage was flexible - that is, as long as it would fall in the face of unemployment. The possibility
             ...