Answer to Question #220610 in Macroeconomics for Shiva

Question

The model of income determination is called kenysian model. What makes it keysian not classical

Answer 1

Classical holds that full-employment is the employment level the economy will return to and tends to remain in the long run. In contrast, the Keynesian model holds that unemployment is the normal state of the economy, and significant government intervention is required to reach full employment.