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Econ 1-14 Economic Schools of thought

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Econ 1-14 Economic Schools of thought

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STANDARD:
E.1.6 Describe and compare the various economic systems (i.e., traditional, market, command, mixed, feudal, mercantile) and explain their strengths and weaknesses. (E)
E.4.1 Explain how markets underproduce public goods, and analyze the role of government to resolve those market failures.

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Lance Hiles
Lance Hiles
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Econ 1-14 Economic Schools of thought
 

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Econ 1-14 Economic Schools of thoughtVersion en ligne

STANDARD: E.1.6 Describe and compare the various economic systems (i.e., traditional, market, command, mixed, feudal, mercantile) and explain their strengths and weaknesses. (E) E.4.1 Explain how markets underproduce public goods, and analyze the role of government to resolve those market failures.

par Lance Hiles
1

Keynes believed market economies did not fix themselves quickly, since wages & prices changes slowly. Thus, to end a recession, the ____ should use monetary & fiscal policy to increase output and decrease unemployment. This speeds up the process.

2

Today's lesson teaches us that theories are a good start when studying economics, but some theories are wrong. Or they start out right, then go wrong. e.g. Thomas Malthus was right about some things, but he was wrong that we would all ____ .

3

1917, social unrest in Russia led to the Soviet Union. Communism grew there, just as the ____ ____ wrecked market economies & undermined Classical Economics. Smith & Marshall's theories could not explain what happened, or how to fix it.

  
  
4

Economies today moved ____ the ____ of the economic spectrum. Communist countries are using some capitalist ideas, & free market economies have allowed the government to be more involved.

  
  
5

Despite Karl Marx, market-based economic theory was everywhere in the 1800s, U.S., France, & U.K.. These theories are called ____ ____ , explained in the Principles of Economics, by Alfred Marshall.

  
  
6

____ ____ is the only country still using a communist economy. There is little data available about them, so it is unclear if this model is effective. Cuba & China have moved from Communism to Capitalism.

  
  
7

Karl Marx wrote Das Kapital, & which some governments used instead of Adam Smith's theories. This created a war between free market capitalism ( ____ property) & communism (____ ownership of the means of production).

  
  
8

While addressing the 2008 crisis, Keynesian economics argued that governments use deficit spending to stimulate growth. Others argued for use to ____ , a classical approach of cutting spending & decreasing budget deficits.

9

While the founders of economics created ideas about private property and free markets, Karl Marx wrote the Communist Manifesto in 1848, arguing that workers would defeat property owners, thus creating a classless system called _____ .

10

____ ____ is the latest economic theory, a combination of Keynesian & classical economics, a little government stimulus & a little invisible hand of competition.

  
  
11

Adam Smith promoted free trade, but it was David Ricardo that went beyond & created the idea of ____ ____ : two countries can benefit from trade, even if one can produce more of everything, if both focus on what they're best at and then trade.

  
  
12

Some turned to Friedman's ____ ____ of economics during the stagflation of the 1970's. Keynesian economics couldn't explain stagflation, so some macroeconomists argued that stagflation disproved Keynesian economics.

  
  
13

Founder of economics, Adam Smith, wrote the Wealth of Nations is 1776. He explained production, markets and economic theory. Smith's most influential idea was that a person following their ____ ____ ____ could serve the common good.

        
  
     
14

Milton Friedman's Chicago School of Economics argued that the Great Depression was due to monetary policy & not capitalism. He argued for ____ of many programs that were run by the government, such as school vouchers. The government hurt the economy.

15

Economics is not an exact science. It tries to understand human behavior without the benefits of labs or control groups. Economic theories reflect different attitudes about ____ ____ and those change over time. e.g. Humans change over time.

  
  
16

Hayek & Vunmises' ____ ____ of economics argued that government regulations never produced the results it promised, e.g. monetary & fiscal policy. The economy was too complicated to manipulate. This was a reaction against all other theories.

  
  
17

Economic theories are constantly being proven wrong, which is bad because they impact billions of human beings. e.g. 1800s, some combined Malthus' ideas with Charles Darwin's ideas & created ____ ____ ; argued that helping the poor was immoral.

     
  
  
18

Keynes's ideas & Marxist critique opened the door to government involvement. After the Great Depression, nations pursued ____ , allowing private property & markets, but also government ownership of industry & regulations: Norway, Sweden.

19

World population grew from one billion in Malthus' time to seven billion today. He wrote at the start of the ____ ____ & was unaware of advancements in agriculture production. With the information he had, he was kinda right, but still wrong.

  
  
20

Keynes didn't support Communism, but his views contradicted classical economists, who saw government intervention as ____ ____ . Eventually Keynesian Economics became part of mainstream economic theory, proving that theories changes over time.

  
  
 
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