ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Laissez-faire is an economic philosophy of free-market capitalism that opposes government intervention. The theory of laissez-faire was developed by the French Physiocrats during the 18th century.

Detailed explanation-2: -Classical economics refers to the school of thought of economics that originated in the late 18th and early 19th centuries, especially in Britain. It focused on economic growth and economic freedom, advocating laissez-faire ideas and belief in free competition.

Detailed explanation-3: - Understanding Keynesian economics Keynes argued that in a recession, market economies don’t self-correct quickly enough, because prices and wages take time to adjust. He believed that, during economic downturns, governments can help through fiscal policy, such as increasing spending or cutting taxes.

Detailed explanation-4: -Classical economics asserts that economies are self-correcting and function best with minimal government intervention.

Detailed explanation-5: -Keynes and his followers believed that individuals should save less and spend more, raising their marginal propensity to consume to effect full employment and economic growth. In this theory, one dollar spent in fiscal stimulus eventually creates more than one dollar in growth.