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Popularity of classical economics

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[1] Explain how the Great Depression weakened the popularity of classical economics and opened the way to Keynesian economics.

The Great Depression was fairly criticized because of the classical economics it adopted wherein Government was not allowed to intervene in making structural changes and monetary policy using interest rates and open market operations was adopted. All this led to inefficiency in market and deflationary curve leading to bankruptcy and massive depression. Hence Keynesian view was later adopted with expansionary fiscal policy.

Reference no: EM132254442

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