How Did Classical Economists Think That the Self-Correcting Mechanism Would

question 12

Essay

How did classical economists think that the self-correcting mechanism would work to bring the economy out of a recession?

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Definitions:

Fourth Branch of Government

Informally refers to groups that influence the three branches of government defined in the U.S. Constitution (executive, legislative, and judicial) such as the media, the people, or administrative agencies.

Formal Rule Making

A procedure in administrative law where agencies establish new regulations through a process that involves publication of proposed rules, public commenting, and final rule issuance.

Notice-and-Comment Rule Making

A procedure required by law in the United States for federal agencies to give the public notice of a proposed regulation and the opportunity to submit comments.

Interpretive Rules

Administrative rules, issued by governmental agencies, that clarify or explain existing laws and regulations without creating new obligations.