ACCT 210 Lecture Notes - Lecture 5: Public Choice, Perfect Competition, Invisible Hand

• School: College of The Sequoias
• Department: Accounting (ACCT)
• Course: ACCT 210
• Professor: mohamed

Document Summary

Task 3, what is the relation between politics and the economy. Different traditions: state-centric political economy, developed out of mercantilism, defensive mercantilism, protect weaker economies from unfair competition, device is protectionism, aggressive mercantilism. Idea of the social market: balance market competition with the need for social cohesion and solidarity. Infant industries should be protected from foreign competition trade unions are important for example, participation annual wage negotiation > provide workers & vulnerable groups social guarantees: con"s, maintaining high-quality welfare provision is expensive. Keynes and friedman: keynesianism, argues principle of laissez faire" leads to instability and unemployment (example is the great depression, solution to unemployment, cut taxes > so people can consume more. Increase public spending > generate more jobs: would create deficit but this is sustainable because it boosts the economy > multiplier effect, beliefs demand runs market, supports welfare spending only when economy is bad, neoliberalism.