distinguish between classical and modern economic approach
Answers
Answer:
Difference between classical and modern economic approach
The classical theory presents a one-factor (labour) model, while the modern theory presents a more realistic multi-factor (labour and capital) model.
Explanation:
classical economic approach - The fundamental principle of the classical theory is that the economy is self‐regulating. Classical economists maintain that the economy is always capable of achieving the natural level of real GDP or output, which is the level of real GDP that is obtained when the economy's resources are fully employed.
modern economic approach - Modern theory of economic growth focuses mainly on two channels of inducing growth through expenses spent on research and development on the core component of knowledge innovations. First channel is the impact on the available goods and services and the other one is the impact on the stock of knowledge phenomena.
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