Economic perspectives

Question 1

Name one economist who believes in the free market perspective?

Answer 1

Adam Smith

Milton Friedman

Question 2

What is the key ideas of the interventionist perspective?

Answer 2

• individuals can not be self reliant
• market forces are important in the allocation of resources.
• individuals unemployed because insufficient demand for labour.
• government reduce employment by raising the level of aggregate expenditure.

Question 3

Name one person who believed in the interventionist perspective?

Answer 3

John Maynard Keynes

Question 4

What is the key ideas of the Marxist perspective?

Answer 4

• Capitalist system prone to recurrent crises due to certain internal contradictions.
• government policies soften adverse consequences.
• long run economic crises only overcome by complete change in the system

Question 5

Who believe in the Marxist perspective?

Answer 5

Karl Marx

Question 6

What is the key ideas of free market perspective?

Answer 6

• Individuals are rational, well informed and know their best interests.
• unemployed usually because not willing to work for wage rate determined by market forces.
• state should play limited role in economy.
• market forces are the best way to allocate resources.
• organisations like trade unions distort the operation of the labour market.