Classical economics

The classical model is based to a great extent on An Inquiry Into the Nature and Causes of the Wealth of Nations by Type your answer here . A central assumption of the classical model is that prices and wages are perfectly Type your answer here . A second assumption of the model is the idea that supply creates demand, which is called Type your answer here . The model also argues that flexible Type your answer here will equate household saving with business investment. The conclusion is that markets are Type your answer here and automatically move to equilibrium; market shortages and surpluses will not persist. The notion that a market economy automatically adjusts to equilibrium at Type your answer here in the long run leads classical economists to advocate a macroeconomic policy of Type your answer here