economics
economics Social science studying the allocation of
resources in the
production of commodities, and the distribution of these commodities for
consumption in society. Adam
Smith's The Wealth of Nations (1776) is often cited as the first economic treatise. Smith's arguments in favour of
free trade form the basis of
classical economics. Refinements to classical economics included the theory of marginal utility, which argued that need determined value. John Maynard
Keynes' General Theory of Employment, Interest and Money (1936) was an attempt to deal with economic
depression and mass
unemployment. The pressures of
inflation led to the development of
monetarism and the re-emergence of high
unemployment. Economics developed into two areas:
microeconomics studies the economics of firms and individuals, and the workings of individual market mechanisms; and
macroeconomics studies whole economic systems. See also
conservatism;
deflation;
feudal system;
laissez-faire;
mercantilism;
socialism;
supply and demand, law of
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