Classical Economics
Name the book written by Adam Smith.
Wealth of nations
Name three Neo classical economists were a part of this era:
William Jevons, Leon Walras, and Carl Merger
Who gave the theory of rational expectations?
Robert lucas
What does Keynesian economics refer to?
“Demand side” theory or “Demand management”
What is the law of supply and demand?
a concept that defines how a resource seller interacts with resource buyers.
Which one of these economists played a vital role in Classical economists: Karl Marx, John Maynard Keynes or John Baptiste Say?
John Baptiste Say
According to the Neo classical era, how is the value of the product defined?
The values are based on the demand (utility, satisfaction) in the market.
What did Karl Marx develop?
communism.
What is the "general glut"
When consumers and businesses cannot buy out the total output of the country goods.
Excess supply
Was the approach to the political economy largely philosophical?
Yes
What was a major idea advocated and presented by Adam Smith regarding the intervention of the government in the economy?
Lassiez-Faire
What is the difference between classical and neo-classical economics?
Classical: value by supply; more philosophical
Neoclassical: subject: value by demand; more mathematical
What is core idea of nudge theory in behavioural economics?
To change the decision of consumer to buy merit goods
What's an obligation for government in Keynes economics?
Active government policies(interventions)
What does "say's law" mean when it says "there cannot an overproduction of goods"?
It means that growth in the economy can be achieved by increased production, to increase demand.
What does Laissez-Faire mean?
Pronounce it for a brownie point.
"let do"
a reduction in intervention by the government in the economy
What theory did the neo-classical economists reject? and instead what theory did the present?
They rejected 'The Labour Theory' (supply, or cost of production)
and proposed 'Marginal Decision Making'
What is two central idea of monetarist? Who gave this?
Central Bank must control money supply.
Excess money supply creates inflation.
Expansionary monetary policy not to use.
Milton Friedman
What would "general glut" result in?
The surplus will cause firms to lay off workers, leading to a decrease in purchasing power of households, resulting in a further fall in demand for goods and services.(1929 great depression or recession )
Give an example of "The law of Diminishing Marginal Utility". *Cannot use the textbook example*
Why did John Baptiste Say say that there was no such thing as overproduction?
all income was generated by the supply of a product, due to the fact that supply creates its own demand
Who was the first one to display a visual representation of supply and demand?
Alfred Marshal
Name two disadvantages of nudge theory.
Consumer's/ individual Freedom
What government policy did Keynes advocate during an economic recession?
(Expansionary)Fiscal policy
State the law and economist group supported the theory which said, "The value of the product is determined by labour costs of creating the specific good"
"Labour theory". Supported by Classical ecconomists