Pre- Adam Smith

Question 1

Scholastics

Answer 1

• Priests
• Price > free competition, no resource waste, no deceitful behaviour
• Price = cost of production + consumer’s perception of utility

Question 2

Mercantilism

Answer 2

1. Limit import (only those that cannot be locally made) and promote exports > + bot
2. Promote military and economic power
3. Gold and silver important

Question 3

Pre-classist: David Hume

Answer 3

Monetary theory:

• LR theory
• In LR, MS has no impact on real economy
• International adjustment to domestic stock

Question 4

Physiocrats

Answer 4

• Laissez faire ( free competition)

- Agriculture is basis for economic wealth