Classical Theon Classical economists generall view a market economy as a self-adjusting mechanism that will achieve an uilibrium of ma imum productivity, and prices left alone by the government The mechanism will adjust the decisions of millions of Americans to bring into bas5 the supply and demand of goods and labor. Regarding recessions, if workers unemployed because the supply for workers the d (the price fall eventually it will again become p businesses to have more workers at lower wages and thus end unemployment c ilarly, if the demand for goods automobiles, houses, clothing, kit and 50 forth) falls, business inventories will rise and businesspeople will reduce pric (often through rebates, sales, etc.) until demand picks up again. Regarding inflation general increases in prices will reduce demand and automatically bring it line with supply unless the government interferes. In short, classical economic th ory relies on the free movement of prices to counter both recession and inflation