Politics Flashcards
What causes inflation?
The monetary supply increasing faster than goods and services.
How do you cure inflation?
Stop expanding the supply of money.
What ancient civilizations attempted price controls through government regulations and then ultimately failed as a result of these policies?
Egypt - 2830BC - Grain and wage fixing
Sumeria - 2350BC - Reduced government regulation
Babylon - Code of Hammurabi - Wage and price fixing
China - Confusious - Government regulation is necessary
India - Merchant regulation
Greece - Grain price fixing
What caused the collapse of the Roman Empire?
Debasing the silver content of the currency. Increasing decadence and barbarian invasion also didn’t help.
What happens when you place a maximum price on a good or service?
If the max price is greater than the market price, the supply of the good or service will rise.
If the max price is lower than the market price, the supply of the good or service will decrease.
Why is free market capitalism the best economic arrangement?
It allows parties to engage in mutually beneficial transactions free of coercion.
