According to the Classical Theory of Employment in economics, deviations from the state of full employment are regarded as which of the following?

Introduction / Context:
The Classical Theory of Employment is part of macroeconomics and describes how labour markets function under certain assumptions about wages, prices, and flexibility. In classical thinking, an economy with flexible wages and prices tends to operate at full employment in the long run. Deviations from full employment, such as unemployment above the natural level, are viewed as short lived disturbances. This question tests whether a candidate understands that, in the classical view, such deviations are considered temporary rather than permanent features of the economy.

Given Data / Assumptions:

• The question refers to the Classical Theory of Employment, not Keynesian or modern theories.
• The focus is on how this theory views deviations from full employment.
• Options suggest that such deviations might be temporary, permanent, imaginary, or normal long lasting situations.
• We assume the standard textbook presentation of classical macroeconomics.

Concept / Approach:
In classical macroeconomic theory, the labour market clears through flexible wages, and the goods market clears through flexible prices. If there is unemployment or over employment, wages and prices adjust so that the economy returns to its natural full employment level. This adjustment may take some time, but in the classical view, it is inevitable in the absence of rigidities. As a result, deviations from full employment are seen as transitory or temporary and not as persistent or normal states. Therefore, when asked how classical theory regards such deviations, the correct choice is that they are purely temporary in nature.

Step-by-Step Solution:
Step 1: Recall the assumptions of the Classical Theory of Employment, particularly wage and price flexibility. Step 2: Understand that under these assumptions, labour supply and labour demand intersect at a wage rate where all those willing to work at that wage find employment. Step 3: Recognise that if, for some reason, there is unemployment, wages are assumed to fall, making it profitable for firms to hire more workers and restoring full employment. Step 4: See that any departure from full employment is therefore treated as a disturbance that will be removed by market forces over time. Step 5: Compare this understanding with the options: temporary, permanent, imaginary, or normal long lasting situations. Step 6: Conclude that classical economists regard such deviations as temporary phenomena and choose the corresponding option.

Verification / Alternative check:
A way to verify this is to contrast classical and Keynesian views. Keynesian theory acknowledges the possibility of prolonged underemployment equilibrium, where involuntary unemployment can persist due to insufficient aggregate demand and rigidities. Classical theory, however, assumes away such rigidities and relies on wage and price flexibility to argue that full employment is the normal condition. Because Keynesian theory exists largely as a critique of this classical assumption, remembering that contrast helps confirm that classical thinking treats deviations from full employment as temporary.

Why Other Options Are Wrong:
The option stating that deviations are permanent in nature contradicts the central classical idea that market forces restore equilibrium. The suggestion that deviations are imaginary is also incorrect, since classical writers acknowledge that shocks and disturbances do occur, even if they are short lived. The option describing deviations as normal long lasting situations corresponds more closely to the Keynesian concept of underemployment equilibrium than to the classical view. Therefore, none of these alternatives correctly represent classical thinking about employment.

Common Pitfalls:
Students sometimes mix up classical and Keynesian frameworks because both are often taught together. Another common confusion arises from modern macroeconomic discussions that incorporate elements from both schools. Some learners also assume that any theory that mentions full employment must deny the existence of unemployment altogether, which is not accurate. The classical model allows for unemployment during adjustment, but it believes that such unemployment is temporary rather than a stable equilibrium outcome.

Final Answer:
According to the Classical Theory of Employment, departures from full employment are regarded as purely temporary in nature, because flexible wages and prices are assumed to restore full employment in the long run.