Classical economic theory was developed shortly after the birth of Western capitalism. It refers to the dominant school of economic thought in the 18th and 19th centuries.
Classical economics helped countries move from monarchical rule to self-regulating capitalist democracies.
Published in 1776 by Adam Smith, The Wealth of Nations highlights some of the most outstanding achievements of classical economics.
Theories explaining value, price, supply, demand and distribution were the focus of classical economics.
Classical economics was eventually replaced by more modern ideas such as Keynesian economics, which required more government intervention.
An economist is an expert who studies the relationship between a society’s resources and its production or output, using a number of different indicators to predict future trends.
An absolute advantage is when a manufacturer can provide a greater quantity of a product or service for the same price or the same quantity at a lower price than its competitors.
Animal spirits come from the Latin spiritus animalis: “breath that awakens the human mind.” It was introduced by the British economist John Maynard Keynes in 1936.
Autarky refers to a state of self-sufficiency and is commonly used to describe countries or economies that seek to reduce their dependence on international trade.
Automatic Stabilizers is a permanent government policy that automatically adjusts tax rates and transfers payments in a way that stabilizes income, consumption, and business spending over the business cycle.
The balance of trade (BOT) is the difference between the value of a country’s imports and exports over a given period and is the largest component of a country’s balance of payments (BOP).
“Best Effort” is a legal term that represents the obligation of a party to a contract to take all possible steps to fulfill the terms of the agreement.