Contributions to economies

Question 1

John Maynard Keynes

Answer 1

• command economy
• believed free markets are volatile & not always self-correcting
• proposed the ‘under employment equilibrium’ - name given to the economy which went on shrinking, until reached a level of stability

Question 2

Friedrich Hayek

Answer 2

• free market
• promoted idea that private investment rather than government spending would promote sustainable growth (economic growth)
• changing prices relay info. that helps people determine their plans

Question 3

Adam Smith

Answer 3

• free markets
• theory of compensating wage differentials - dangerous or undesirable jobs pay higher wage to attract workers
• ‘invisible hand’ - tendency of free markets to regulate themselves by means of competition & supply & demand

Question 4

Karl Marx

Answer 4

• Theories about capitalism & communism
• Classless system, means of production owned communally, private property non-existent, - promotes equality.
• Believed in capitalism - so countries trade & industry controlled by private owners, not state! (free markets)