r Mohammad Jafari: ECON 102 Econnect ECONOMICcS apter 24 Homework Question 2 (of
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r Mohammad Jafari: ECON 102 Econnect ECONOMICcS apter 24 Homework Question 2 (of 15) value: 0.33 points Did Keynesian or Classical economics support laissez-faire policy? ONeither Classical nor Keynesian economics supported laissez-faire policy. Both Classical and Keynesian economics supported laissez-faire policy. O Classical economics supported laissez-faire policy OKeynesian economics supported laissez-faire policy. References eBook & Resources Worksheet Section: The Historical Development of Macro Learning Objective: 24-01 Discuss the history of macro, distinguishing Classical and 527 . Keynesian, macroeconomists.Explanation / Answer
Answer: 3rd Option: Classical Economics supported laissez-faire policy.
Reason: The term 'Laissez Faire' s a french term meaning "allow to do". This term describes a policy with minimum government interference in the economy and the society. Classical Economics is associated with Adam Smith, which was further developed by David Ricardo, John Stuart Mill etc.
The main idea behind Classical Economics is that markets work most effeciently on it's own, and government intervention could hamper a nation's economic growth. It argues for free competition and free trade and says that government intervention could discourage private sector.
Keynesian Economics on the other hand, recommends that government intervention is required to promote economic growth. It was followed by economies during the Great Depression. Therefore, it doesn't follow the laissez-faire policy.
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