summarizes economic theories

1. Theory Key ideas Similarities Differences
Classical
economics
Emphasizes the importance of free
markets, minimal government
intervention, and the role of self-
interest in driving economic growth
Believes in the importance of
individual choice, market
efficiency, and laissez-faire
policies
Rejects the idea of government
intervention in the economy, and
does not prioritize addressing
issues of inequality or social
justice
Keynesian
economics
Argues that government intervention
is necessary to stabilize the economy
during recessions, and that
government spending can boost
demand and create jobs
Believes that government can
play a positive role in
promoting economic stability
and growth
Views markets as inherently
unstable, and emphasizes the
need for government intervention
during times of economic crisis
Marxist
economics
Argues that capitalism is
fundamentally exploitative, and that
workers are exploited by capitalists
who extract surplus value from their
labor
Emphasizes the importance of
social justice, and advocates for
a more equitable distribution
of wealth and resources
Views capitalism as inherently
flawed and unsustainable, and
advocates for a radical
transformation of the economic
system
Neoclassical
economics
Focuses on the idea of rational
decision-making by individuals and
firms, and emphasizes the importance
of markets in allocating resources
Emphasizes the importance of
market efficiency and
individual choice
Views government intervention as
potentially distorting market
outcomes
Behavioral
economics
Incorporates insights from psychology
to explain how individuals make
economic decisions, and emphasizes
the role of cognitive biases and
heuristics
Emphasizes the importance of
understanding human behavior
and decision-making in
economic analysis
Views individuals as imperfect
decision-makers who may not
always behave rationally or make
optimal choices