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VOLUNTARY EXCHANGE: The process of willingly trading one item for another. The emphasis here is on "willingly." Voluntary exchanges are the heart and soul of market transactions, and should be contrasted with the "involuntary" exchanges mandated by government taxes, laws, and regulations. While involuntary government-forced exchanges play an important role in a mixed economy, economists really, really like voluntary market exchanges because they promote economic efficiency.
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ASSUMPTIONS, CLASSICAL ECONOMICS Classical economics, especially as directed toward macroeconomics, relies on three key assumptions--flexible prices, Say's law, and saving-investment equality. Flexible prices ensure that markets adjust to equilibrium and eliminate shortages and surpluses. Say's law states that supply creates its own demand and means that enough income is generated by production to purchase the resulting production. The saving-investment equality ensures that any income leaked from consumption into saving is replaced by an equal amount of investment. Although of questionable realism, these three assumptions imply that the economy would operate at full employment.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store hoping to buy either a replacement nozzle for your shower or a decorative windchime with plastic . Be on the lookout for jovial bank tellers.
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A thousand years before metal coins were developed, clay tablet "checks" were used as money by the Babylonians.
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"How wonderful it is that nobody need wait a single moment before starting to improve the world. " -- Anne Frank, diarist
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OBX
Oslo Stock Exchange (Norway)
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