Answer to Question #142453 in Macroeconomics for YOYO

Question

what are the major policy conclusions of classical economics?

Answer 1

Classical economics emphasize that free markets are self-regulating, and lead to efficient outcomes. Additionally, classical economics assume inelastic long run aggregate supply curve in macroeconomics, such that any deviation from full employment would not last long. The theory emphasize the need to limit government intervention and protect markets from barriers to efficient operations.