Economics2

Economics2 Daniel Sanchez AP Economics CH. 10 OUTLINE CLASSICAL THEORY -The classic theory of employment is grounded in Say’s Law, the completed interest rate mechanism, and downwardly flexible prices and wages -The pairing return curve is vertical at the full-employment level of result; the aggregate demand curve is stable if the money confer is constant. -Government macroeconomic policies are unnecessary and counter-productive; automatic, built-in mechanisms provide for full-employment output.

Keynesian THEORY -Keynesian analysis unlinks saving and investment plans and discredits downward price-wageflexibility, implying tha t changes in aggregate spending, output, and employment, are likely. -The aggregate supply curve is homy; the aggregate demand curve is unstable largely because of the peevishness of investment. -Active macroeconomic policies by government are necessary to quench recessions or deppressions. -Say’s Law is the disarm...If you want to get a full essay, order it on our website: OrderEssay.net

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