According to economic theory, the govt will discourage negative externalities by heavy merchandise and services that generate result costs. Government can encourage positive externalities by subsidizing goods and services that generate spillover benefits.
Economic theory is predicated on the belief that investors and customers are rational and extremely “efficient machines,” namely, that they create the most effective decisions for themselves. Laboratory tests reveal that investors' behavior is way a lot of sophisticated relative to the behavior assumed in most economic theories. The four economic theories offer facet economics, new classical economics, economic theory, and economic expert economics.
Since the 1930s, four Economic theory are proposed: economic expert economics, monetarism, the new classical economics, and supply-side economics.
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