We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Midterm - Essay Example

Comments (0)
Summary
Name Professor Class Date News article exhibiting two economic principles: What to Do When the Invisible Hand Stops Working The article of Mark Buchanan at Bloomberg entitled “What to Do When the Invisible Hand Stops Working” best exemplified two of the most prominent economic principles which are the market’s invisible hand of Adam Smith and John Maynard Keynes’ necessity for government to intervene (usually with its fiscal and monetary policy)…
Download full paper
GRAB THE BEST PAPER
Midterm Essay
Read TextPreview

Extract of sample
"Midterm"

Download file to see previous pages This was mentioned in passing but was not explained in detail leaving the reading without much clue that compels this paper to elaborate. With regard to the invisible hand of the market, Adam Smith originally meant that the mechanism of the invisible hand is a result of the market settling the distribution of goods and the prices between what the producers want to produce and what the consumers chooses freely what to consume. As a result, producers will have to create goods that are cheaper to produce undermining competition and gain market share. This competition will ultimately benefit the individual consumer and hence, the greater community as a whole. On a bigger picture, Adam Smith’s invisible hand may have been the precursor of globalization or free market. Perhaps even predated David Ricardo’s idea of Comparative Advantage of trading across economies in suggesting the idea of the free of trade as Adam Smith already tackled the dynamics of free trade across economies. Adam Smith posited that a poor country will naturally have a cheap labor and would be willing to work for wages lower than those their rich counterpart countries. As a result, industry will naturally move to these countries as they make more profits by discounting on the labor cost as afforded by the poor country. As the demand for labor increases, wages will also increases and will result in the higher purchasing power of those mentioned laborers. As purchasing power increase, this new consumers will create a demand that local industry will have to hire additional labor to cope with the increasing demand of goods. As this continues, the labor cost of the once poor country will eventually equal those of the host rich country to the point that the advantage of the poor country to provide cheap labor will be lost that that it will no longer be advantageous for the rich country to move their factory or industry to the poor country. In effect, Adam Smith was presupposing that the invisible hand will “guide” and regulate the market in the most beneficial manner. In contrast to Smith’s self-regulation nature of his invisible hand, Keynes on the other hand proposed the necessity of government intervention either to stimulate an economy or to address an economic crisis. Government can stimulate long-term growth by spending more on infrastructure and public service which has the effect of putting more money in the system. When there is more money in the system by purchase and the salaries paid to workers, these workers who are recipient of government spending will have more money to buy goods. This has a “ripple” effect to stimulate the economy because one man’s spending is another man’s income resulting to an economic growth. During economic hardships, the fiscal and monetary policies are the two most common tools available to the government to stabilize the economy during an economic crisis. This was an idea of John Maynard Keynes who posited that the extreme swings in the economy is caused by the excessive or lackluster aggregate demand for goods and services and cause the economy either towards expansion or recession. To control this aggregate demand, the ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Psychology Midterm Essay
One personality trait that I find to be highly heritable includes temperament. Every baby has a different temperament when they are born, and that can largely be due to what the child has inherited from both its father and mother. According to Paris and Tyrer (2006), “Most personality traits have high heritabilities….” (pp.
4 Pages(1000 words)Essay
Midterm
The empire was to later grow very rapidly under the management of Genghis Khan and a number of other leaders who came after him. The Empire expanded through inversion of its neighbors, and in most of the inversions, it emerged victorious consequently expanding her territories in every direction (Craig 41).
3 Pages(750 words)Essay
Midterm Essay
It has hugely facilitated movement of goods, services and human capital across the geographical area. The emigration and immigration of people across the globe has provided people with wide scope of personal and professional growth. Most importantly, it has provided businesses with huge opportunities to expand globally and brought in new order that relies on universal values, promotes equity amongst people cutting across race, culture, color and nationality.
8 Pages(2000 words)Essay
Working thesis statement
Right from Snow White and the seven dwarfs to Anna Nicole Smith, the world has been one big stage of make-believe. Is all before our eyes a true reflection of beauty and happiness I for one don't agree. My research will be directed to reveal the truth behind what lies beneath that thin coat to stardom and healthy living.
2 Pages(500 words)Essay
Midterm Essay
There are four traditional types of evidence: real, demonstrative, documentary, and testimonial. Some rules of evidence apply to all four types and some apply only to some or one of them. Real evidence is a thing the existence or characteristics of
6 Pages(1500 words)Essay
Comparative Politics Midterm Essay
As Mark Kesselman and other authors observe, “....political science is particularly concerned with the study of power: how it is gained, lost, used, abused, organized, distributed, and
5 Pages(1250 words)Essay
Midterm Essay
eople are used because they are the perfect candidates for a political position, someone who just accepts information and suggestions without questioning it. This indicates that the government can not really be believable and credible since it is like walking on water, something
3 Pages(750 words)Essay
Midterm Essay
rough attending trade shows, not only at the local level but international; which will have them exposed to what the market demands are and therefore be able to make the right decisions when it comes to finding the right export strategies. Just in case also travelling is much of
5 Pages(1250 words)Essay
Midterm
Quantitative research: The presence of statistical tests, less time consuming and more generalized are the main strengths of this method whereas this method does not provide in depth analysis, it less subjective and it does not provide
4 Pages(1000 words)Essay
Let us find you another Essay on topic Midterm Essay for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us