POSC270 Lecture Notes - Lecture 7: Capital Control, Income Tax, Hyperinflation
14 Mar 2016
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Document Summary
Poliical economy: the study of the relaionship between states and markets. Criical components to all economies: markets: interacions between the forces of supply and demand that allocates resources, property: goods or services that are owned by an individual or group. Examples: sandwiches, candy, movies, parks, haircuts, concerts, trains and so on. Private goods: possible to exclude others from consuming, consumpion reduces availability, ex. Sandwiches: markets are efecive at providing private goods. Public goods: impossible to exclude others from consuming, consumpion does not reduce availability, ex. Clean air: markets are bad at providing public goods. States shape the economy in many ways: social expenditures, taxaion, creaing and regulaion money, regulaing markets, regulaing internaional commerce. Social expenditures: the state"s provision of public beneits, such as educaion, health care, and transportaion: commonly called welfare or the welfare state, advantages. Taxaion: used to pay for social expenditures, comes from a variety of sources. Some taxes ( sin taxes ) produce direct beneits: disadvantages.
