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Classical view denies the possibility of general overproduction and underproduction. In other words, classical theory denies the possibility of deficiency of aggregate demand and involuntary
Classical view denies the possibility of general overproduction and underproduction.
In other words, classical theory denies the possibility of deficiency of aggregate demand and involuntary unemployment.
Analyze and explain this view of classical macroeconomics by the theoretical system behind it.
While you answer this question:
- Explain the theoretical system behind this proposition briefly ;
- Given at least two examples in order to show why 'demand is never deficient' in the classical model;
- Support your explanations and examples with the necessary diagrams and functions that display the relationships between related variables.
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