Answer to Question #278284 in Macroeconomics for Anonymous

Question

How Keynes theory of employment is a special case of classical one??

Answer 1

Keynes denied the believe from classical theory of employment which stated that an economy would automatically adapt and provide employment in full even in equilibrium and also believed that the volatile and ungovernable psychology of markets would lead to periodic booms and crises. Keynes General theory of employment is a sustained attack on the classical economies of it's time.