Classical Dichotomy

Classical Dichotomy is a classical economic idea that states general price levels may be influenced by monetary forces yet there isn’t real affect on activity. The classical dichotomy was integral towards the thinking of some pre-Keynesian economists to be a long-run proposition and is also found today in new classical hypotheses of macroeconomics. Keynesians and also monetarists reject the actual classical dichotomy, given that they argue that price are sticky.