Discuss on Classical Theory

This article focus to Discuss on Classical Theory. Basic principle of the classical theory is that this economy is self‐regulating. Classical economists maintain that this economy is always efficient at achieving the natural higher level of real GDP or productivity, which is the higher level of real GDP that is obtained if economy’s resources are totally employed. While circumstances arise every now and then that cause the overall economy to fall below so they can exceed the natural higher level of real GDP, self‐adjustment mechanisms exist inside the market system that work to bring the economy back for the natural level of real GDP.