Classical Economics during the Great Depression: The Epic Failure
The Classical economic model failed during the Great Depression due to the idea of sticky prices. Because people had little money to spend, everyone was scared to buy goods and services. Unfortunately, this was the case, and the depression was so depressing that people refused to buy goods. And according to classical economics if there is a downturn, then the economy will sort itself out! However, John Keynes noticed how bad the economy had been and decided to create a new form of economics.
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An Economic overview of the Great Depression:
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An Economic overview of the Great Depression:
Extra Info
The difference between Classical and Keynesian economics