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Keynesian economics uses government to increase aggregate demand through both spending and tax cuts. Supply-side economics tries to increase aggregate supply through tax cuts.

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MeGustaCulo

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5y ago

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How do classical and Keynesian economics compare and contrast in terms of their fundamental principles and approaches to economic theory?

Classical economics emphasizes the importance of free markets and minimal government intervention, believing that the economy will naturally self-regulate. Keynesian economics, on the other hand, advocates for government intervention during economic downturns to stimulate demand and stabilize the economy. The key difference lies in their views on the role of government in managing the economy.


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