By Donald Marron
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Extra resources for 30-Second Economics
FRIEDRICH VON HAYEK Free market capitalists argue that it’s individuals and not the state who are best equipped to make economic decisions—companies should be free to trade any commodity without restrictions. MARKET SOCIALISM the 30-second theory Can you combine the market and state ownership of the means of production? Some economists stand by a tradition that considers you can, and that this provides the best of both worlds. In the traditional and theoretical model, developed by the Italian economist Enrico Barone and further explored by the Polish economist Oskar R.
In particular, it should boost its own spending to fill the gap in aggregate demand from the private sector. By spending on new projects, making transfers to people in need or cutting taxes, the government could boost demand. Firms would then employ more workers to produce more. Those workers would spend their paychecks, and you would have a virtuous cycle of growth that would get the economy out of the recession and reduce unemployment. Keynesianism became the most popular economic doctrine of the “golden age” of capitalism (1945–1973).
They can also include fiscal policies, such as investing heavily in public services, building projects, or cutting taxes. inflation The increase in the price of goods and services over a given period of time, usually measured using the Consumer Price Index. A small amount of inflation is generally regarded as acceptable because it helps to smooth relative price adjustments in the economy. Very high inflation, however, leads to instability in the financial markets and worker unrest as the real value of wages drops.
30-Second Economics by Donald Marron
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