Agree or disagree and why? Keynes Vs Classical COLLAPSE When it comes to these t
ID: 359527 • Letter: A
Question
Agree or disagree and why?
Keynes Vs Classical
COLLAPSE
When it comes to these two topics I believe I'm more of a Classical Economist. Classical Economist leans more toward the Laissez-Faire Economics Market meaning a free market. In this type of market the government is not involved or cannot intervene. Classical Economist believe that a self regulating Market will adjust and govern itself without outside interference. Capitalist, government, and monopolies, would not be an issue which should allow a market to reach full employment by itself.
Secondly Classical Economist believe in Say's Law which means supply creates own demand. Say's law also states that when an economy produces a certain level of a real GDP, it also generates the income needed to purchase that level of real GDP. This means the economy is always capable of demanding all of the output that its workers and employers choose to produce. Therefore the economy is always capable of achieving the natural level of GDP. Under these circumstances, classical Economist are convinced that the interest rates, wages and prices are flexible.
Explanation / Answer
Well based on the Information provided in the article clearly Assume the Effect and Equilibrium that may achieve in long term. Such Classical Economist vie can be summarised as below:
While Keynes has clearly uprightly rejected the classical theory as mentioned that:
In nutshell Keynes theory is based on the practical situation while the classical theory of economy is theoretical in nature. Hence that is unrealistic and irrelevant to solve the problem of current global economy.
I completely agree with Keynes point of view too. Because when it comes to finding the solution in our life we don’t just sit tight and wait for right time. Based on the nature and gravity of situation industry, business and working class take the decision.