Answer to Question #169804 in Macroeconomics for Bernard

Question

Using two economist write on criticisms of the classical theory

Answer 1

Keynes argued that the theory is unrealistic,since he regarded full employment as a special situation.He also observed that the general situation in a capitalist economy is one of under employment.

Adam Smith criticised the theory especially the concept of the long-run equilibrium,adding that the deficient stability features of the classical adjustment process and the unfitness of the concept of the free competition to the modern economy.