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Essay / Research Paper Abstract
The classical economic model is said to be dichotomous. This 5 page paper explains the nature of the dichotomy and the implication this has for monetary policy. The bibliography cites 6 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEclassdic.rtf
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numerous contradictions which are more difficult to resolve as it is also one of the least flexible models. In order to assess the dichotomies the model itself needs to
be examined. There are many aspects we will look at the basic and some specific areas to assess the contradictions. The classical school of economics is
exactly what it sounds like; one of the original schools of thought which developed in the eighteenth and ninetieth centuries (Nellis and Parker, 2000). The major thrust of this work
is the way in which marks actually operate (Nellis and Parker, 2000). Classical economist believe that if the markets are left to operate completely freely with
out any delay to clearing then the result would be a prosperous economy (Nellis and Parker, 2000). The role of government in this case should be the facilitation of the
speedy clearing. This looked to supply side economics can be seen as based on the theories of Free Market, Says Law and Quantity Money Theory (Nellis and Parker, 2000).
Free market theory said that any economy left to its on devices would tend to move towards a point of full employment equilibrium (Nellis and Parker, 2000). This
would work by the unemployment n the society causing a surplus of supply over demand which would then decrease the wages. As a result in the decrease in wages demand
would once again increase for labour, therefore more jobs would be provided and the balance would be restored (Nellis and Parker, 2000). If wages are set to low or to
high the market will find its own equilibrium using the rules of supply and demand. The role of the government is to ensure that there is the freedom of the
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