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20 Cards in this Set

  • Front
  • Back
One's own country should promote exports and accumulate wealth at the expense of its neighbors
Lasting Contributions of Classical School
Enforcing Property Rights
National Defense
Public Education
Scientific Revolution
Society free to follow the natural law of self interrest
Lasting contributions of Socialism
Neo-Classical School
Democratic Socialist
Helped Capitalism get rid of rough edges
More humane conditions for workers
Major Tenets of Classical School
Minimal government involvement
Self interest
Harmony of interest
Role of money in the mercantilist era
Money needed to keep the same output of volume
Industrial Revolution
Developed in England led to increased emphasis on the industrial aspect of economic life
Lasting Contributions from mercantilists
Emphasizing the importance of international trade
Mercantilist Era
Gold & Silver
Colonization & Monopolization
Strong Central Government
How did the scientific revolution affect the classical school
Justified property income and that rent interest and profits are just rewards for the ownership
Smiths views on money in the economy
Money is vital means of payment
Exploiting working class
Constant class struggle
Private propery is consumer goods allowed
capital and land owned by government
New society emerges
Peopole are self less
No government
No personal belingings
Harmony of Interest
There is an invisible hand that channels self interest behavior in such a way that socail good emerges
Rejected parliament & military
One large union
Workers use general strike as wepon
Public policy implication of income distribution
Not always best to have redistribution because less incentives to become rich
Perfect Competition
Minimal government
Large number of buyers and sellers
Easy entry
Makes a profit
Strong Central Government
Needs to promote mercantilist goals
required to enforce uniform natonal regulation
Lorenz Curve
Closer the curve the more income is distributed, the further away the less equal income is distributed
One Seller
Barriers to entry
Profit Maximization
No substitution