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2 types of econ

2 types of econ - of Classical Economists because while...

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There are many different groups and sub groups of economics, but the two groups I am comparing are known as Classical Economics and Keynesian Economics. Classical Economics is defined as modern economic theories that study the effects of resource scarcity, monetary policy, and competition on supply and demand of goods and services in the marketplace. Classical Economists stresses economic freedom and promotes ideas such as laissez-faire and free competition. These economists’ really reoriented economics away from an analysis of the ruler’s personal interests to a class based interest. However, Keynesian Economics is defined as an economic theory stating the active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability. They believe the opposite
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Unformatted text preview: of Classical Economists because while Classical Economists generally think that the market will be able to adjust on its own, Keynesian Economists believe that the government must step in to solve the problems in the market. Classical Economists and Keynesian Economists also differ in the question of unemployment. Classical Economists believe that if the economy were left on its own, it would adjust to reach an equilibrium wage for workers and the economy would be at full employment. Keynesian Economist argued that government policies could be used to increase aggregate demand, which would then increase economic activity and reduce high unemployment. These are just arguments from each of the two groups of economics. Both groups differ in the way they would solve problems in the marketplace....
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