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The classical view of the economy, which promotes free markets, has been criticized for ignoring several key factors.
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One, income inequality.
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Classical economics assumes that market forces will naturally lead to full employment and economic equilibrium.
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However, it often overlooks the issue of income inequality, which can be exasperated in a free market system.
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Two, market imperfections.
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Classical economics assumes perfect competition, perfect information, and no transaction costs, which are rarely the case in real -world markets.
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Three, externalities.
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These are the costs or benefits that affect a party who did not choose to incur those costs or benefits...