The History of Economics Flashcards
What does Economics mean literally?
Term Economics coined around 1870
Derived from the Greek
oikos- for house or settlement
nomos for laws or norms
What is a Market Economy?
Market is based consumers self-interest
Capitalism: private ownership by individuals
Government has limited role: upholding the legal system and maintaining public security
What is a Command Economy?
Market is based on central planning
Full government control
What is a Mixed Economy?
Combine the Market economy and command economy
Consumers and government both make decisions of the input and output for the economy
What is Mercantilism?
Sixteenth to eighteenth centuries
Limited imports – maximize exports
Procession of Gold and silver bullion are synonymous with wealth.
Large gold reserves fund larger force for a longer period of time
Stagnation
Who are some 19th Century Economists?
Adam Smith
John Maynard Keynes
Karl Marx
Who is Adam Smith?
Pursuing self-interest also benefits the community in the end
Believe in a market economy
Proposed the invisible hand (Pursuing self-interest also benefits the community in the end)
Competition produces the best distribution of goods and services
Encourages specialization
More value with the same labour.
Systems are self-regulated by the activity of their parts
Who is John Maynard Keynes?
Believe Government intervention and spending in the economy is a necessity
Coined the term Macroeconomics
Keynesian theory led to government spending which ended the 1930s Depression
Who is Karl Marx?
Believe in a Command economy
What is Monetarism?
Formulated in the late 1940s and early 1950s by Milton Friedman
University of Chicago School
Supply-side Economics
More highly regarded (and followed) today in North America
