The major difference between the Keynesian model and the classical theory of employment is that

Question

Quizplus · Accepted Answer

The major difference between the Keynesian model and the classical theory of employment is that in the Keynesian model, wages and prices are assumed to be sticky or inflexible downwards, while in the classical theory of employment, wages and prices are assumed to be flexible downwards. This has implications for how the economy responds to changes in demand and supply, and the role of government intervention in stabilizing the economy. The other options listed are not necessarily unique to one model or the other.

The Major Difference Between the Keynesian Model and the Classical