History: Economic Systems & Thought

What was the primary goal of mercantilist economic policy during the 16th to 18th centuries?

To accumulate national wealth, specifically gold and silver, by maintaining a positive balance of trade where exports exceed imports.

Who is often called the 'Father of Modern Economics' and wrote 'The Wealth of Nations'?

Adam Smith.

What does the term 'laissez-faire' mean in the context of economic policy?

An approach where the government avoids interfering in the workings of the free market, allowing it to operate according to its own laws.

Which 19th-century philosopher and economist co-authored 'The Communist Manifesto'?

Karl Marx.

What major 20th-century event led to the widespread adoption of Keynesian economic policies in Western nations?

The Great Depression.

What is the basic definition of a 'mixed economy'?

An economic system that combines elements of both private enterprise and government intervention or public ownership.

How did mercantilism view the economic relationship between a mother country and its colonies?

Colonies existed to provide raw materials to the mother country and serve as a captive market for its manufactured goods.

According to Adam Smith, how does the 'invisible hand' benefit society?

By pursuing their own self-interest in a free market, individuals inadvertently promote the general economic well-being through competition and efficiency.

What was the primary economic shift caused by the Industrial Revolution?

A transition from agrarian, handicraft-based economies to ones dominated by machine manufacturing and the factory system.

In Marxist theory, what is the fundamental cause of historical change and social evolution?

Class struggle, specifically the conflict between the class that owns the means of production and the class that provides labor.