POPP2406 Week 2 Mind map
- Created by: Elizbooks
- Created on: 06-05-22 16:42
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- POPP2406 Week 2
- Ideologies
- Liberalism, Keynesiansism and Marxism
- All have different ideas to fix the 'troubled marriage' relationship between gov and business
- How best to control + distribute resources?
- Liberalism, Keynesiansism and Marxism
- Liberalism, classical and neoclassical economics
- 16-17th century - tightly regulated state to gain power and wealth was collected as gold
- Merchant challenged this - trade became the source of wealth and not gold anymore
- Invisible hand theory by Adam Smith
- (Craig 2006) People gain benefits by following their own interests
- Customers control demand and suppliers respond by supplying more goods to the market
- Demand and supply meet at an equilibrium point - enough to supply the demand from customers
- if price is too high there are not enough customers to purchase which leads to unsold products
- If price too low, producers will not make enough money = shortage in goods supplied
- Demand and supply meet at an equilibrium point - enough to supply the demand from customers
- Customers control demand and suppliers respond by supplying more goods to the market
- (Craig 2006) People gain benefits by following their own interests
- Liberal economics - firms want to supply more goods and set market prices
- Idea: Government should remove restrictions on businesses e.g. add incentives to market
- Better investments, more freedom, more choice, less restrictions
- Idea: Government should remove restrictions on businesses e.g. add incentives to market
- Problems
- Does not deal with economic crises well
- Wall Street Crash and Global Financial Crash
- Does not deal with economic crises well
- 16-17th century - tightly regulated state to gain power and wealth was collected as gold
- Keynesian economics: history
- Attempt to resolve problem with economic crises cycles
- Gov intervention needed to fix/avoid economic crises to minimise costs
- Gov can use counter-cyclical measures/fiscal policies to maintain growth and enhance welfare
- Gov should borrow if required and use deficit spending to help with reduced investments and to boost consumer spending habits and control total demand
- Demand is needed to enhance the economic system
- Generous welfare state benefits numerous people - mainly poorer people
- It reduces unemployment and redistributes wealth to poorer people which means they can still purchase goods and services - enhances economy
- Attempt to resolve problem with economic crises cycles
- Marxism
- Aware that capitalist systems have periods of crises
- Businesses in the long-term aim to increase wages to boost consumption but if all decrease wages to increase profit, then consumption will reduce which could equate to a crisis
- Significant that the state find ways to control and monitor this situation and fix this problem
- Government will create policies that benefit capitalism because they depend on businesses for economic growth
- Education - highly qualified workforce
- Infrastructure and investments - improves productivity levels
- Businesses in the long-term aim to increase wages to boost consumption but if all decrease wages to increase profit, then consumption will reduce which could equate to a crisis
- Aware that capitalist systems have periods of crises
- Government must balance the interests of all firms due to their difference and uniqueness
- Untitled
- Ideologies
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