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Essay / Economics: The evolution of the classical and the classical...
The long period method adapted by classical authors conceptualizes the way in which forces gravitate depending on the situation. The pure logic of the relationship between relative price and income distribution was analyzed for an ideal environment with salient features such as static prices, uniform profit and wage rates. This static view put forward by classical economists is an assumed state of which we have no idea how it might arise or develop in the future. . Therefore, classical economics is considered static and not dynamic. The market price depends on the difference between current supply and actual demand. ● If the price difference is positive, the market price is lower than the natural price. ● If the price difference is negative, the market price is higher than the natural price. ● If the price difference is zero, the market price is equal to the natural price. The production of a product increases if the market price is higher than the natural price. Although the long-run method has been considered the core of economic analysis, short-run issues have also received special attention.