Comparison and Contrast of Keynesian and Classical Economic Essay

analogy and Contrast of Keynesian and Classical Economic - Essay ExampleAs the study discussesKeynes further argued that the direct of total expending in the economy could be less to provide full employment. This disagreed with the classical economists who believed that the involution set out adjustments, allowance, and prices would help to prevent the unemployment. Keynes said that the full employment happens when the amount of total spending is enough. Moreover, if the spending is non sufficient, then the unemployment will occur.This essay highlights thatKeynes also disagreed with the relationship between saving and investment not being enough to support classical claims that the support full employment. Classical economist described both forces that verify full employment occurs. Those are the interest rate adjustments and wage/price flexibility. If the interest rate falls as planned and the investors result in little spending, salaries and prices can still support to ens ure full employment is reached. When a competitive market occurs, the low demand will lead to fall wages and prices that will finally lead to all outputs being sold and prevent unemployment.Keynes disagreed with classical assumptions somewhat high wages and prices are not consistent with the real world. Keynes explained that variety of forces prevented prices and wages from adjusting quickly. These forces prevent prices and wages from changing quickly and in a downward direction.Keynes said that many product markets are noncompetitive or oligopolistic.