Economic Theories and Market Dynamics

Read the following excerpt on the evolution of economic thought:

In the 20th century, conventional economic theories were challenged by Keynesianism, which posited that total spending in an economy, known as aggregate demand, would ultimately shape economic outcomes. This contrasted with classical economics that primarily focused on supply-side factors. Furthermore, the emergence of behavioral economics introduced psychological insights into decision-making, providing a more nuanced understanding of market anomalies. As economic crises unfolded, the need for adaptive frameworks became evident. Critics of Keynesianism and its reliance on government intervention argued that such measures could distort market signals, potentially leading to inefficiencies and long-term dependency.