Q2- fiscal and monetary policy Flashcards
Who wrote the “wealth of nations”?
Adam Smith
Who is known as the “Father of Economics”?
Adam Smith
Who thought of the ‘Invisible hand”?
Adam Smith
Who created the idea of 3 factors of production?
Adam Smith
David Ricardo was known for what theory?
Comparative advantage (a theory that proves that trade (primarily free trade) benefits all parties)
What were John Stuart Mill’s views?
First theorist of modern economics(had some socialist views), agreed with better distribution of income
Who strongly promoted the working class, and said that capitalism would implode?
Karl Marx
Who started neoclassical economics?
Alfred Marshall
What did Alfred Marshall promote?
Laissez-faire, as well as supply and demand, marginal utility and costs of production
How did John Maynard Keynes modernize/change the economy?
Suggested that the government needs to to get involved during a recession to stimulate the economy.
- more government spending
- lower interest rates
Was Milton Friedman in favour of monetary or fiscal policy?
Monetary policy
Milton Friedman had what views?
Free market, laissez-faire
What are the four aspects of aggregate demand?
- consumption
- investment
- government spending
- difference between exports and imports
What is the objective of fiscal policy?
keep employment rate high, help budget
What are some things to keep in mind when thinking of taxes?
- when calculating federal taxes, do it increments (ex. first amount at 15%, remainder at 20.5%, etc. )
- there are municipal, provincial and federal taxes
- taxes go to public programs, running government and crown organizations, and debt
