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The Classical and Keynesians models treat savings completely different. a.In the Keynesian model what happens to the economy when savings increases?

  1. The Classical and Keynesians models treat savings completely different.
  2.  
  3.  a.In the Keynesian model what happens to the economy when savings increases? 

  4.       b.In the Classical model, what happens to the economy when savings increases. (Hint:In the Classical model financial markets must clear. So, savings and investment must be equal.)

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Answer In the Keynesian model when savings increase it can lead to a decrease in overall economic ac... blur-text-image

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