CLASSICAL ECONOMICS: A body of economic thought originating with the work of Adam Smith based on the idea that the operation of unrestricted markets generates aggregate or national production that fully utilizes the economy's resources and maintains full employment. The three primary assumptions of classical economics are flexible prices, Say's law, and the saving-investment equality. See also | Adam Smith | The Wealth of Nations | flexible prices | Say's law | saving-investment equality | full employment | Keynesian economics | macroeconomics | invisible hand | laissez faire |
