Answer to Question #186529 in Macroeconomics for Abigail Williams

Question

With the aid of appropriate diagrams, show and explain why classical economists viewed money as a veil

Answer 1

The classics and their followers believe that money is just a "veil" behind which the real, real economy is hidden. Money, they say, of course, contributes to the exchange of goods, speeding up and simplifying it, but in principle it would be possible to do without them. Primary productive activity, processing of resources, and so on. The commodity eventually tends to be exchanged for the commodity, and money is only a neutral intermediary.

According to this view, exaggerating the importance of money and its role distracts from the much more important, essential categories and processes that are "veiled" by money. This, they say, is a passion for form at the expense of content. From this approach, Marxism naturally follows with its desire to create a moneyless society, with its belief that such a society can not only exist, but also function effectively. All you need is to remove the veil…

You can take any chart

The graphs show that aggregate demand and aggregate supply are related to income and output and investment-savings (IS); the curve, and As can be seen from these graphs, that money only serves the whole process, contributing to development or oppression