DEVS 100 Chapter Notes - Chapter Week 3: Keynesian Economics, Subsistence Agriculture, Free Trade
24 Oct 2017
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Law of accumulation constant need within capitalism to reinvest profits back into the business in order to remain competitive. Infers that capitalism requires growth and that growth potential is infinite. Comparative advantage specialization in commodities that a country can produce most efficiently, and trading those for commodities that a country is less efficient at producing. The invisible hand a term coined by adam smith. It is the idea that markets are largely self-regulating and self-equilibrating, with little need for external intervention from the government, except for creating and enforcing rules of the market and in cases where there are market failures. Keynesianism a school of economic thought associated with the work of john. Argues that markets require regular state intervention if they are to operate efficiently and effectively, but state intervention should be as minimal as possible and should sometimes be withdrawn once market equilibriums have been restored. The state"s role is to correct market failures, not to dominate markets.
