Economic Thinking (not usually assessed)

Question 1

What was Adam Smith’s basic ideas?

Answer 1

Country’s wealth is based on value of goods and services in produces, invisible hand guides production (self regulating markets)

Question 2

What is laissez faire economics?

Answer 2

let do, meaning free market economics when there is little government intervention and few regulations

Question 3

19th century evolution of micro and macroeconomics

Answer 3

Countries should specialise in the production of goods, production of goods is the source of demand (supply creates its own demand)

Question 4

Keynesian economics

Answer 4

Demand determines the level of national income, governments have a role in managing total demand

Question 5

Monetarism (new classical economics)

Answer 5

Main determinant of economic growth is total amount of money in economy.

Question 6

Behavioural economics

Answer 6

Consumers make decisions that aren’t always rational, design policies that incorporate the nudge theory

Question 7

Circular economy

Answer 7

Regenerative and restorative approach to economic activity - products are long-lasting and designed to be reused and recycled