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What is the major difference between the classical model and the Keynesian​ model?

What is the major difference between the classical model and the Keynesian​ model?

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ANSWER ::

-> Classical Model theory suggested that Every Economy Is Self Regulated. it believes That Economy Is capable To Achieve Its Natural Real GDP And Output In The Country. The Difference between Classical Model and The Keynesian model Are As Under ::

Sr No. Classical Model Keynesian Model
1 Classical Model Believe That Fiscal Policy Is Not Capable In The Recession Situation So Classical Model Prefer To use Monetary Policy In that Kind Of particular Situation Keynesian Model Believe That In Recession Situation Government Have To Use Fiscal Policy to control The Recession
2 Classical Theory Believe that Government should Maintain balance Budget Keynesian Model Believe That Government Borrow more Money In Recession to Increase Spending In The Economy
3 Economic Equilibrium Happened At Full Employment Economic Equilibrium Happened At Below Full Employment
4 In Classical Model Economy Is Stable. in That Model Economy Is Unstable

Rahul Sunny answered 2 years ago
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