Answer to Question #104934 in Macroeconomics for iqra

Question

what are the mojor policy conclusions of classical economics?explain how these policy conclusion follow from the key assumptions of the classical theoritical system?

Answer 1

The fundamental principle of the classical theory is that the economy is self‐regulating. Classical economists maintain that the economy is always capable of achieving the natural level of real GDP or output, which is the level of real GDP that is obtained when the economy's resources are fully employed.