Comparision between classical and keynesian?
The following are the differences between the Classical and Keynsian Macro economic models:
1. In Classical Model, demand for money depends only on transaction need, in Keynesian model it also depends on speeculative demand influenced by interest rate
2. In keynesian model, wages are downward rigid, in Classical economics wages are completely flexible
3.In classical economics, supply creaters its own demand and hence there is no scope of underemployment equilibrium, in Keynes there is scope for less than full employment equilibrium.
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