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Distinguish between a laissez-faire economist and an activist economist. LO1

   Distinguish between a laissez-faire economist and an activist economist. LO1

Macroeconomics

David Colander 8th Edition

Chapter 10, Problem 1

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Step 1

Proponents of laissez-faire economics believe that the economy functions best when there is minimal governmental interference. The term "laissez-faire" is French for "let do" or "let go," implying that the government should let the economy run itself. The main Show more…

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Key Concepts

Laissez-faire Economics

This concept refers to an economic philosophy that emphasizes minimal government intervention in the marketplace. Laissez-faire economists argue that free markets operate best when left alone, allowing the natural forces of supply and demand to regulate economic activity, optimize resource allocation, and promote individual freedom and innovation.

Activist Economics

This concept pertains to an economic philosophy that supports proactive government intervention to address market failures, stabilize the economy, or achieve social and economic objectives. Activist economists believe that targeted policies such as regulation, fiscal measures, or monetary interventions are necessary to correct imbalances, protect consumers, and promote overall economic welfare.

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