Essay Economics Guided Reading Answers

More efficiency for private firms. Other organizations are more likely to have more efficiency compared to other groups that are controlled by the government. As they have profit incentive for being creative and innovative and cutting down costs. Freedom for private enterprise to thrive on their own. Private enterprise can perform public services and jobs more quickly than the government can.

According to Friedman, “Economic freedom is also an indispensable means toward the achievement of political freedom,” (Friedman 1). He says that in order to have political freedom, we need to have economic freedom. In a capitalist economy people thinks that they are free to sell a commodity, but they are

Thus, the society will not see complete elimination of government involvement. Therefore, the source relates to a modern liberal view in which a mixed economy would be supported. In this modern liberal view, the source would support individuals to be granted the freedom to pursue their self-interests and have the motivation to work harder in order to create the most profit. The source would also support government intervention for those who have not adopted the principles of self-interest and individualism. The source stresses that individual incentive to work and create a living for one’s self is a vital factor in order for a society to function and succeed, but has also accepted that government intervention is just as essential in times when the society and economy needs to be guided and brought back to the prosperity it has through the principles of individual freedom. Contenders of this source would argue that individual freedom puts too much power in the hands of large, corrupt corporations who worry only about their own selfish

Its heavy involvement in government is clear, and promotes inequality within society. ____ and ____ present the idea that a restructuring of society needs to take place to eliminate the corruption in government created by capitalism. The current system is “very much a product of government policies and subsidies” (24) they report. Historically, government has had some form of control over corporations, but modernly they no longer hold that power, and instead work to further the need of investors. They report that according to the current system, “the main job of governance is to make sure the profit system works smoothly” (26). This entanglement of capitalism and government effect how democracy presents itself in the country. Democracy is put in place to allow all to govern equally and have equal chance, but in the topic of the future of employment the conversation leaves out most

Most classical economists lived in a period where their nations’ economic policies were hindering growth (Sowell, 2006). Consequently, they devoted their lives to develop theories to remove impediments to growth. Artificial stimulus was one of the first factors they identified that hinder growth (Sowell, 2006). The entity that was primarily responsible for the artificial stimulus of an economy was government. To remedy this problem, classical economists proposed the concept of a free market. Their basic perception of a free market was “a system where the prices and quantities of the things we buy and sell are unencumbered by artificial barriers or constraints” (Genetski, 2011, p.10). In the classical economic framework, this definition of a free market was satisfactory, but future generations protested that this statement creates a laissez-faire economy by totally removing government from the economy. Consequently, a better definition of a free market is required.

A market is either a physical place or a tool that allows buyers and sellers to come together to exchange goods and services with one another. In this economy, peoples purchases count as votes, and once all the votes are counted, the producers can tell what the people want. Therefore, the consumers play a key role in determining what to produce. The United States, Canada, and Germany are some examples of a market economy. An advantage is that this economy can gradually adjust to change. Individual freedom is encouraged in this type of economy, so people can produce what they think will sell. Consumers can spend their money on whatever goods or services they prefer. The government also doesn’t interfere much with the people because as long as competition exists, the economy takes care of itself. A final advantage is that there is a high variety on goods and services available, and that plays into the high level of consumer satisfaction. A disadvantage of this economy is that is doesn’t provide for everyone’s basic needs in their country, and it doesn’t provide enough of the services that people value highly. Another disadvantage is change leaves people and businesses uncertain of their future. If a few conditions are not met, a market economies could easily

Capitalism is a social system based on the principle of individual rights. Politically, it is the system of laissez-faire, meaning freedom. Economically, this freedom portends a system in which trade, industry, and the means of production are private owned and operated to maximize profit. It also entails the ability to pass on to future generations. Capitalism may be associated with a negative denotation due to contravening responses in modern society depicted by media. However, there is high efficiency and strong economic growth in this structure. Firms in a capitalist based society face incentives to be efficient in production, to cut cost, and to avoid waste. “In a free market state, money is the motivator”, says Kiyoshi Nagatani in “Capitalist Exploitation and the Law of Value”. Money is an incentive which urges people to be innovative and hardworking. This expands the economy in means of increasing the gross domestic product and improving living standards. In theory, everyone can benefit from increased wealth within a community.

A market economy is an economy in which decisions regarding investment production and distribution are based on supply and demand, and prices of goods and services are determined in a free price system. (Alvather, 1993) Market economies may be practical, but they also rest upon the fundamental principle of individual freedom: freedom as a consumer to choose among competing products and services; freedom as a producer to start or expand a business and share its risks and rewards; freedom as a worker to choose a job or career, join a labor union, or change employers. Market economies are not without their inequities and misuses. A number of them genuine, however it is likewise verifiable that cutting edge private endeavor and entrepreneurial soul, coupled with political vote based system, offers the best prospect for safeguarding flexibility and giving the most extensive streets to investment development and success for all. (Davis, 2009)

Firstly, the economic problem is split into three questions, which are: what to produce? How to produce? Who to produce for? These three questions can also be summed up as scarcity which is the inadequate amount of resources available. Consumers have wants which are unlimited; they would always want more, but due to the economic problem, scarcity, not everyone will get there ‘want’ fulfilled, therefore causing a problem. Different countries can attempt to overcome the economic problem in several ways; which is to apply a different economy system to their country. Due to scarcity consumers will now have to make a choice of what they want, by sacrificing the next best alternative when making a decision, this is known as opportunity cost.

How would you describe the economy today in part of the world you are living? From my point of view I would say the economy is taking two steps forward and ten steps back. On a daily basis, people around the world, whether they are poor, middle class or rich, are faced with the most important economic question. How do I allocate my limited resources to fulfill my insatiable wants? Many people use up all their resources, end up with a higher demand of wants and their basic need are not met; resulting in falling into the loop hole of poverty. Why don’t government seek better ways to curb the economy by controlling the rapidly increasing population, decreasing poverty levels of the nation and injecting funds in to skill development institutions?

A society could not function well if no one worried about the outcomes of the market and if the market was left alone to run by itself. This is why a self-regulating market is a concept that, according to Polanyi, is absurd. According to Margaret Somers and Fred Block, “Polanyi’s central argument is that a self-regulating economic system is a completely imaginary construction; as such, it is completely impossible to achieve or maintain” (2014). With Polanyi’s insight, it is easy to see that one way to obtain a “good society” is the need for government interference. The government, however, should not take advantage of its people if it is working

This paper is gonna discuss how the free market is unjust, I’m gonna present three Moral Arguments against the free market and show three examples of government policies that help the unfortunate. The first argument is the equality that the free market creates it creates an extremely wealthy population and an impoverished population.The second argument is that the free market makes us live inauthentic lives they make us value more material items versus the beauty of nature. The final argument is gonna be the exploitation of workers in the free market.The free market is hurting the Unfortunate while benefiting the wealthy.

“ a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade. ”

Free markets result in efficiency and economic growth by improving the living standards of its participants. Adam Smith’s argument supports this idea where he suggested that an invisible hand moves the economy into prosperity. He argued that if people can participate in the economy freely, good consequences will follow and if one pursues his own interest, the society gains more effectually than he really intends. However, this may be true, people must keep in mind there are good and bad consequences. Social benefits are usually ignored because people exchange goods and services to benefit oneself. This results in inefficient allocation of resources.

Throughout history the world has experienced several types of socio-economies, from Mussolini’s fascism to Mao’s communism. All of those economies have its weaknesses and strengths and most have countries that can validate its effectiveness. Yet, only one economy has risen above the rest. But before we could decide which economy is truly better for society, there has to be criteria on which to judge the economy’s effectiveness. First, what is a society? In essence, it is a network of bonds we as human beings forge under the assumption, that working together we can all be happier than if we were only looking out for ourselves. With society, everyone is able to concentrate on what they do best, reap the benefits from the skills of others, and avoid the conflict that would arise otherwise. Thus, it follows that the ultimate goal of society is to ensure the happiness of everyone. And currently, only one economy has staved off the test of time and reached that goal. Capitalism, with its merit system, flexible cost adjustments, and having no other economic contenders is able to achieve a better society than any other socio-economic system can.