Reference no: EM13800507
Government spending can raise Aggregate Demand and real GDP in the Classical model.
Classical economists said that the velocity of money is very volatile.
Classical Economists claim interest rates guarantee that savings will equal investment.
According to money neutrality, the Ms determines nominal but not real variables.
According to Says Law, demand creates its own supply.
Classical economists said that markets are highly competitive.
In the Classical model monetary policy is cannot change AD.
Classical Economists claim interest rates guarantee that savings will equal investment.
Classical influence starts to wane during the 1960s.
Laissez-faire means the government can do anything it wants to the economy.
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