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Questions and Answers
What was the primary goal of mercantilism during the 16th to 18th centuries?
What was the primary goal of mercantilism during the 16th to 18th centuries?
Who is regarded as the 'father of modern economics'?
Who is regarded as the 'father of modern economics'?
Which concept is primarily associated with Adam Smith's economic theories?
Which concept is primarily associated with Adam Smith's economic theories?
What did classical economists generally believe about state intervention in the economy?
What did classical economists generally believe about state intervention in the economy?
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Which of the following schools of economic thought emerged after mercantilism?
Which of the following schools of economic thought emerged after mercantilism?
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During which period did the Neoclassical School begin to develop?
During which period did the Neoclassical School begin to develop?
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What criticism did Adam Smith make regarding the motivations of economic agents?
What criticism did Adam Smith make regarding the motivations of economic agents?
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How did the Classical School contribute to the evolution of economic thought?
How did the Classical School contribute to the evolution of economic thought?
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What is the primary benefit of countries trading based on comparative advantage?
What is the primary benefit of countries trading based on comparative advantage?
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According to Malthus, what factors might control the growth of human population?
According to Malthus, what factors might control the growth of human population?
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What does utilitarianism primarily focus on in terms of moral worth?
What does utilitarianism primarily focus on in terms of moral worth?
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What is meant by the term 'comparative advantage'?
What is meant by the term 'comparative advantage'?
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Which of the following statements aligns with John Stuart Mill's perspective on liberty?
Which of the following statements aligns with John Stuart Mill's perspective on liberty?
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What did Thomas Robert Malthus predict about the consequences of unchecked population growth?
What did Thomas Robert Malthus predict about the consequences of unchecked population growth?
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What economic principle does David Ricardo's work emphasize in trade?
What economic principle does David Ricardo's work emphasize in trade?
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What is a key concept introduced by Alfred Marshall in his work on economics?
What is a key concept introduced by Alfred Marshall in his work on economics?
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In 'Utilitarianism', how does Mill suggest actions should be judged?
In 'Utilitarianism', how does Mill suggest actions should be judged?
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What method does Marshallian economics utilize to analyze industry behavior?
What method does Marshallian economics utilize to analyze industry behavior?
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Which of the following statements best describes the view of classical economists before the Great Depression?
Which of the following statements best describes the view of classical economists before the Great Depression?
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Which work is John Maynard Keynes best known for?
Which work is John Maynard Keynes best known for?
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Which term did Veblen introduce to critique the continuity between classical and neoclassical economics?
Which term did Veblen introduce to critique the continuity between classical and neoclassical economics?
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What did the Great Depression reveal about classical economic theory?
What did the Great Depression reveal about classical economic theory?
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In Marshallian economics, what does the Marshallian cross represent?
In Marshallian economics, what does the Marshallian cross represent?
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What stance did Marshallian economics take regarding state intervention in the economy?
What stance did Marshallian economics take regarding state intervention in the economy?
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What key factor does Keynesian economics emphasize in determining aggregate economic behavior?
What key factor does Keynesian economics emphasize in determining aggregate economic behavior?
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According to Keynesian theory, why is government intervention necessary?
According to Keynesian theory, why is government intervention necessary?
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What was John Maynard Keynes's perspective on the long run?
What was John Maynard Keynes's perspective on the long run?
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Which statement reflects Alvin Hansen's relationship with Keynesian economics?
Which statement reflects Alvin Hansen's relationship with Keynesian economics?
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In the context of the IS-LM model, what do the 'IS' and 'LM' curves represent?
In the context of the IS-LM model, what do the 'IS' and 'LM' curves represent?
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What key contribution did Hicks make in relation to Keynesian theory?
What key contribution did Hicks make in relation to Keynesian theory?
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Which of the following is NOT a measure proposed by Keynes for economic stability?
Which of the following is NOT a measure proposed by Keynes for economic stability?
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What was a primary distinction between Keynesian economists and classical economists?
What was a primary distinction between Keynesian economists and classical economists?
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Study Notes
History of Economic Thought
- Overview of Schools of Thought:
- Mercantilism (1500s-1700s)
- Classical School (1700s-1850s)
- Neoclassical School (1860s-present)
- Keynesian School (1880s-present)
Mercantilism
- Period: 16th-18th centuries
- Dominant economic school during the emergence of capitalism
- State's role: central in accumulating wealth (especially precious metals)
- Balance of trade: maintain a positive balance
- Policy: utilize legislation and protective policies to increase national wealth
The Classical School
- Period: coincides with the Industrial Revolution
- Key Economists:
- Adam Smith (1723-1790)
- David Ricardo (1772-1823)
- Thomas Robert Malthus (1766-1834)
- John Stuart Mill (1806-1873)
Adam Smith
- The Wealth of Nations (1776)
- Invisible hand concept: self-interest drives economic activity, benefiting society.
- Criticized state intervention, emphasizing individual self-interest.
David Ricardo
- On the Principles of Political Economy and Taxation (1817)
- Comparative advantage: countries gain by specializing in goods where they have a lower cost of production.
Thomas Robert Malthus
- An Essay on the Principle of Population (1798)
- Malthusian Population Trap: population growth outpaces food production, leading to inevitable famine and check on growth
- Power of population is superior to the power of the earth
John Stuart Mill
- Utilitarianism (1863)
- Utilitarianism: actions are judged by their contribution to overall happiness, not on religious grounds.
Neoclassical School
- Key Economist: Alfred Marshall (1842-1924)
- Principles of Economics (1890)
- Economic concepts:
- Supply and demand
- Marshallian Cross
- Marginalism
- Marginalism: Decisions based on incremental adjustments
Marshallian Economics
- Partial equilibrium method: analyzing individual markets isolating factors
- Focus on supply and demand curves and equilibrium price and quantity
- Analysis of returns to scale (increasing & decreasing)
- Limited role for government intervention
Keynesian School
- Key Economist: John Maynard Keynes
- Explanation for the Great Depression
- The General Theory of Employment, Interest, and Money
- Aggregate demand is crucial for economic stability:
- Government intervention is essential during economic downturns
- "Long run" not a reliable guide to current economic situations
- Macroeconomics do not equal microeconomics
Alvin Hansen
- American Keynes
- Math error in Keynes' theories
- Fiscal Policy and Business Cycles
- IS-LM model contributions and indeterminacy problems
Hicks and Hansen Synthesis
- IS-LM model: graphical representation showing the interaction of investment and savings, and money supply and demand in determining equilibrium
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Description
Explore the key schools of economic thought from Mercantilism to Keynesian economics in this quiz. Delve into the contributions of prominent economists like Adam Smith and David Ricardo, and understand the evolution of economic ideas over the centuries.
