Which of the following correctly describes a difference between the Classical and Keynesian models? The goods market equilibrium condition is different. The extent of crowding out is different. The mechanism by which the economy reaches goods market equilibrium is different. I and III only. I, II and III. II and III only. III only. I only.
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Step 1: In the Classical model, the goods market equilibrium condition is determined by the equality of planned investment and saving, while in the Keynesian model, it is determined by the equality of planned aggregate expenditure and actual output. Show more…
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