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History of Economic Thought IBEB > History of Economic Thought Lecture 1 > Flashcards

History of Economic Thought Lecture 1 Flashcards

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1
Q

Pre Adam Smith “Economists”:

A
  1. Aristotle
  2. Scholastics
  3. Mercantilists
  4. Pre-Classicist David Hume
  5. Physiocrats and Quesnay
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2
Q

Natural price

A

price emerging under free and effective competition, without monopoly, recourse waste and deceitful behaviour

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3
Q

Who came up with “Natural price”?

A

Scholastics

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4
Q

Which pre-Adam Smith “economists” were against mercantilists?

A

Pre-Classicist David Hume

Physiocrats and Quesnay

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5
Q

Contours for later developed quantity theory of money

A

Pre-Classicist David Hume

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6
Q

National Accounts Model
Empirical knowledge about model parameters
Agriculture is basis for economic wealth
laissez faire, laissez passer

A

Physiocrats and Quesnay

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7
Q

laissez faire, leissez passer

A

Physiocrats and Quesnay

Government should promote free competition and free trade

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8
Q

Which 2 revolutions led to start of classical thought?

A
  1. Scientific revolution

2. Industrial Revolution

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9
Q

List 5 main ideas of Classical School:

A
  1. Limited government intervention
  2. Self-interested economic behaviour
  3. Harmony of interests
  4. All economic resources and activities important
  5. Economic laws
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10
Q

Who wrote “The Wealth of Nations” (1779)?

A

Adam Smith

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11
Q

Adam Smith’s Labour theory of value

A

Relative prices are determined by relative production costs

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12
Q

Adam Smith in the book ‘Price Theory” first put focus on:

A

Labour productivity, but no role of demand in formation of prices

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13
Q

Adam Smith agreed with the Scholastics that:

A

wages/rents/profits all tend towards the “Natural Price”

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14
Q

Market price

A

Price that prevails in the market: supply VS effectual demand

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15
Q

Why Adam Smith thinks competition is good for the economy efficiency?

A

resources are devoted to most efficient uses, output is max.

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16
Q

Adam Smith criticised ___ for ___:

A

Mercantilists for restricting international trade

17
Q

What are 3 government functions according to Adam Smith?

A
  1. Protect society against violence and foreign intervention
  2. Protect individuals against injustice and oppression by other members
  3. Keep public work and institutions alive
18
Q

When is “Public Good” first mentioned?

A

By Adam Smith when he describes the role of government (maintenance of public work and institutions)

19
Q

According to Adam Smith, what drives Economic Growth?

A

Capital Accumulation

20
Q

Who first mentions “efficient wage”?

A

Adam Smith in the Theory of Wage Fund

21
Q

During what times Thomas Malthus grew up?

A

English colonial times

22
Q

Who came up with the Population Growth

Theory?

A

Thomas Malthus

23
Q

What is implicitly mentioned in Thomas Malthus’s Population Growth Theory?

A

Diminishing Marginal Returns

24
Q

What mechanisms does Thomas Malthus introduce to keep population growth down?

A 
Preventive checks (reduce birth rates)
Positive checks (increase death rate, famine, diseases)
25
Q

Who came up with the Theory of Market Gluts?

A

Thomas Malthus

26
Q

What does Theory of Market Gluts mean?

A

Potential insufficiency of effective demand -> workers cannot buy back total output -> landlords should consume to avoid glut of good on market and hence prevent market stagnation and unemployment, spending creates effective demand without adding to production costs

27
Q

What is Thomas Malthus’s Population Theory in Economic Policy?

A

No government relief to the poor, make people have fewer children

28
Q

What is Thomas Malthus’s Theory of Market Gluts in Economic Policy?

A

Prevent abolishment of Corn Laws, so no free trade, enrich landowner, avoid stagnation

29
Q

Who was the #1 Fan of Corn Laws?

A

Thomas Malthus

30
Q

What did Thomas Malthus’s Theory of Market Gluts showed today?

A

Awareness of problem that lack of demand could lead to unemployment

31
Q

Who later build on the Thomas Malthus’s Theory of Market Gluts?

A

John Maynard Keynes

History of Economic Thought IBEB (3 decks)

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