CLASSICAL V. KEYNESIAN
Classical: - Competition good
- Invisible hand (gov/economy can regulate itself)
- Economy balanced at full employment
- Economy always close to or at full employment
- Support the trickle down effect (help rich first, everyone else 2nd)
Keynesian: - Competition flawed
- AD is the key not ASClassical: - Competition good
- Invisible hand (gov/economy can regulate itself)
- Economy balanced at full employment
- Economy always close to or at full employment
- Support the trickle down effect (help rich first, everyone else 2nd)
Keynesian: - Competition flawed
- Leaks & savings cause recessions
- Ratchet effects and sticky wages block Say's Law
- In the Long-run, we are dead
Salma, thank you for adding the graphs they make it easier to understand the difference between both schools. The video is also very interesting but I also have a video that even though its over the same thing it goes more in depth and it has good examples. Take a look https://www.youtube.com/watch?v=Xt_L8WFKvLc
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