By 1937 At Least Six Attempts Had Been Made To State Keynes`s General Theory In Mathematical Form. To What Extent Were These Models Successful In Identifying The Difference Between ``keynesian`` And ``classical`` Economics?

KEYNESIAN AND CLASSICAL ECONOMICSQuestion : By 1937 at least hexad attempts had been made to state Keynes s General Theory in mathematical form . To what extent were these models successful in identifying the difference amid Keynesian and Classical economicsINTRODUCTIONThe general theory by Maynard Keynes states that the take aim of employment is indomitable by the marginal efficiency of keen , marginal propensity to consume and the real interest place , he also the take aim of output and employment is determined by aggregate demand and that the aggregate demand sess be increased through an increase in authorities expenditureKeynes and so advocated for government intervention in steering the thriftiness while the classical economic expert argued that the government should not substitute with the running of the prudence , on unemployment according to Keynes theory this chore could be resolved by the use of government policies , the dickens theorists differ in the causes and the solutions of unemployment , to the classical economists unemployment is caused by excess affix which is caused by broad(prenominal) net rates , high wage rates means low demand and and then this causes unemployment , and then the Classical economist believe that the deliverance should be left wing to set up itself until an equaliser is reached at full employmentSays impartiality was genuine by Jean Say who was a French man of affairs according to this theory there plentynot be demand without add together according to this law a recession which is characterized by high unemployment is not caused by low demand or miss of money , however an increase in money lend will result to inflation .

The Say s law therefore clearly identifies the difference between the Keynes theory and classical economists in their explanation of the sparingClassical Economists and Say s lawClassical economist supports Say s law that sum up causes demand and that there is never over fork out , the legal philosophy states that people will supply things to the economy so that they can get money to buy other goods in the economy that are of the same value they have supplied . This is in draw and quarter with the classical economists who argue that money does exist in an economy and that money will execute in the economy and this flow of money flows from the businesses to the people through paying jobsThe classical economist states that the price level is changed by the level of money supply , also that the amount of supply will always be at full employment such that producers will not change the level of supply but will adjust the price levels to achieve the required demand level therefore because supply creates its own demand then in the pertinacious run the economy will be at equilibrium and this means very low or no unemploymentAccording to the Says law the classical economist therefore defined the model of the economy as followsX Q M X V , whereis the price level , Q is the quantity of goods sold , M is the money supply and V is the velocity of money flow . As...If you want to get a full essay, order it on our website: Orderessay

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