Foundations Flashcards
was elected president and implemented a “New Deal” for America
Franklin Delano Roosevelt
The new deal introduced social welfare, regulated banks and industry and invested in infrastructure to create jobs
Franklin Delano Roosevelt
Spending increased and the economy began to grow
Franklin Delano Roosevelt
Economic instability and rejection of democratic and capitalist systems in much of the world contributed to the breakout of World War 2
Franklin Delano Roosevelt
The war fuelled massive spending, which promoted economic growth and the end of the great depression
Franklin Delano Roosevelt
The costs of the war and the destruction brought universal demands for global solutions to international problems
Franklin Delano Roosevelt
Best known for his support of free markets
Friedrich Von Hayek
Realized that the major problem for any economy is how to coordinate people’s actions so that what is needed is produced
Friedrich Von Hayek
Believed free markets achieved this objective even though the coordination was not part of anyone’s intent
Friedrich Von Hayek
he believed that one of the causes of the unemployment could be linked to government involvement in the economy
Friedrich Von Hayek
He argued that government spending increased the money supply thereby stimulating businesses to make investments that were unwarranted
Friedrich Von Hayek
The economy would grow but as a result of artificial economic forces
Friedrich Von Hayek
Demand was not a product of real wealth, but rather the governments printing press
Friedrich Von Hayek
The way to avoid the busts, he argued, is to avoid the booms that cause them
Friedrich Von Hayek
He argued against government planning because he believed a central authority could not possibly coordinate all the activities of an economy
Friedrich Von Hayek
Warned the government control of our economic lives would inevitably lead to “big government” and eventually to totalitarianism
Friedrich Von Hayek
Milton Freidman a strong supporter
Friedrich Von Hayek
First used his ideas to battle the great depression because of his ideas
John Maynard Keynes
His general theory revolutionized the way economists think about economics
John Maynard Keynes
He argued that economic growth relied on the total or “aggregate” demand of consumers
John Maynard Keynes
Unemployment and low wages were obstacle to economic prosperity
John Maynard Keynes
He wanted unemployment and incomes to be kept stable or increase so that consumption would contribute to aggregate demand and increased production
John Maynard Keynes
He argued that during economic downturns governments should increase spending to provide job security thereby ensuring that consumer demand would continue to drive production
John Maynard Keynes
Bretton Woods wanted to regulate the
currency
