What is the difference between classical economics and behavioral economics?
1: Classical economics deals with investing money and behavioral economics deals with spending.
2: Classical economics refers to 19th century economics while behavioral economics deals with modern economics.
3: Classical economics assumes people are rational and logical while behavioral economics adds psychology to the mix.
4: There is no difference. They are different terms for the same thing.
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the classical economics refers to the 19th Century Economics with behavioral economics deals with the modern economics is a good to provide the basic and the terms conduct conduct in the RBI
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The difference between classical economics and behavioural economics is that, classical economics assumes that people are rational and logical while behavioural economics adds psychology to the mix.
Classical economics assumes that people will always make rational and ideal economical decisions.
Behavioural economics on the other hand realises that people are highly irrational beings, and takes their irrationality into account while formulating economic principles.
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