Sunday, 18 January 2015

Erroneous Economic Assumptions

The following is a list of what I believe are erroneous economic assumptions.  While the list is not meant to be exhaustive, these assumptions lead to erroneous conclusions.

1) The labour theory of value
2) The quantity theory of money
3) Say's law
4) Neutrality of money
5) Factors of production are only land, labour and capital
6) Man's needs and wants are insatiable
7) There's no such thing as a free lunch
8) Money is a commodity that acts as a medium of exchange
9) Real costs are opportunity costs