Classical economists belief essay

  Classical economists belief that  prices and quantities adjust to the changes in the forces of supply and  demand and that the economy produces its potential output in the long  run.  On the contrary, Keynesian economists believe because of price and  wage rigidities the economy’s equilibrium output in the long run may be  less than its potential output.  What is price-wage rigidity?  Do you  agree with Keynes assessment that wage-price rigidity requires  government’s involvement in the markets?  Why?  Why not?

250 words


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