Synopsis of Adam Smith and John Maynard Keynes

Август 1, 2022

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Synopsis of Adam Smith and John Maynard Keynes

Содержание

2. Emma Shanley Adam Smith Scottish Economist 1723-1790 Born in Kirkcaldy, Scotland 5 June 1723 School in
3. Emma Shanley The Power of the Invisible Hand Pursue individual interest Result: Benefit society in general
4. Emma Shanley Laissez-Faire Promote free trade Build up the infrastructure of the country Provide a legal
5. Emma Shanley Productive and Non-productive Labour Productive Produced goods for sale Making money to reinvest E.g.
6. Emma Shanley The Labour Theory of Value Distinguished between value in use and value in exchange.
7. Emma Shanley The Canons of Taxation Equality– Tax payments should be proportional to income Certainty– Tax
8. Emma Shanley The Division of Labour Improve the productiveness of labour. For instance, the making of
9. Emma Shanley Exam Questions Examples 2006 section B
10. Emma Shanley John Maynard Keynes British Economist 1883 - 1946 Born in Cambridge, England Son of
11. Emma Shanley Publications A Treatise on Money – 1930 Bestseller The General Theory of Employment, Interest
12. Emma Shanley Fiscal Policy Government controlled tax levels and public spending. E.g. an economy has slowed
13. Emma Shanley The Theory of the Multiplier Injection of money into a business. Creates more income
14. Emma Shanley The Liquidity Preference Theory of Interest Rates Rate of Interest fixed by the Central
15. Emma Shanley Saving and Investments Savings and Investments were not equal to each other. Savings were
16. Emma Shanley Exam Question Examples 2002 section A
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Слайд 2

Emma Shanley
Adam Smith Scottish Economist 1723-1790
Born in Kirkcaldy, Scotland 5 June 1723
School in

Kirkcaldy
1737—University of Glasgow
Studied at Oxford University 1740-1747
Lectured in Edinburgh and Glasgow University between 1748 to 1763.
Author of The Publication “The Wealth of the Nations”

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Emma Shanley
The Power of the Invisible Hand
Pursue individual interest
Result: Benefit society

in general
E.g. set up business for profit and create employment for people at the same time.

Believed people were driven by selfishness and this was morally acceptable as this benefited society.

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Emma Shanley
Laissez-Faire
Promote free trade
Build up the infrastructure of the country
Provide a

legal system
Defend the country

Believed the government should not interfere except for to provide the following:

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Emma Shanley
Productive and Non-productive Labour
Productive
Produced goods for sale
Making money to reinvest
E.g.

Baker

Non-productive
Actors
Teachers
Engineers

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Emma Shanley
The Labour Theory of Value
Distinguished between value in use and

value in exchange. See my example below.

Diamonds
Has limited number of uses.
Large value in exchange.

Water
Has many uses
Small value in exchange

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Emma Shanley
The Canons of Taxation
Equality– Tax payments should be proportional to

income
Certainty– Tax liabilities should be clear and certain
Convenience: Taxes should be collected in a manner convenient for taxpayer
Economy – Taxes should not be expensive to collect and should not discourage business.

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Emma Shanley
The Division of Labour
Improve the productiveness of labour.
For instance,

the making of a single pin involves eighteen separate operations, which are entrusted to eighteen separate workmen; and the result is, that whereas one man working alone could make perhaps only twenty pins in a day, several men working together, on the principle of division of labour, can make several thousands of pins per man in one day.

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Emma Shanley
Exam Questions Examples
2006 section B

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Emma Shanley
John Maynard Keynes British Economist 1883 - 1946
Born in Cambridge, England
Son of John Neville

Keynes Professor of Economics at Cambridge
Won a scholarship to Eton and later to Kings College Cambridge
Lectured at Kings College from 1908

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Emma Shanley
Publications
A Treatise on Money – 1930 Bestseller
The General Theory of

Employment, Interest and Money - 1936

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Emma Shanley
Fiscal Policy
Government controlled tax levels and public spending. E.g. an economy

has slowed down
Unemployment levels are up
Consumer spending is down
Businesses are not making any money
Government decreases taxation
Consumers have more money to spend.
Government spends money by buying services from the market (such as building roads or schools).
Jobs are created.
Result:
More money in the economy and less taxes to pay
Business will now begin to make money again

He did not believe in Laissez-Faire

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Emma Shanley
The Theory of the Multiplier
Injection of money into a business.
Creates

more income than the amount invested.
The formula for the Multiplier is as follows:
1
1 – MPC + MPM + MPT

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Emma Shanley
The Liquidity Preference Theory of Interest Rates
Rate of Interest fixed

by the Central Bank
Settles at a level which brings about equal Supply of and Demand for Money

Supply meant the money in circulation.
Demand meant the reasons why people want to hold onto money rather than invest it.

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Emma Shanley
Saving and Investments
Savings and Investments were not equal to each

other.
Savings were greater than the amount that entrepreneurs are willing to invest.
Causes underemployment in the economy.

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Synopsis of Adam Smith and John Maynard Keynes

Содержание

Emma ShanleyAdam Smith Scottish Economist 1723-1790Born in Kirkcaldy, Scotland 5 June 1723School in

Emma ShanleyThe Power of the Invisible HandPursue individual interestResult: Benefit society

Emma ShanleyLaissez-FairePromote free tradeBuild up the infrastructure of the countryProvide a

Emma ShanleyProductive and Non-productive LabourProductiveProduced goods for saleMaking money to reinvestE.g.

Emma ShanleyThe Labour Theory of ValueDistinguished between value in use and

Emma ShanleyThe Canons of TaxationEquality– Tax payments should be proportional to

Emma ShanleyThe Division of LabourImprove the productiveness of labour. For instance,

Emma ShanleyExam Questions Examples2006 section B

Emma ShanleyJohn Maynard Keynes British Economist 1883 - 1946Born in Cambridge, EnglandSon of John Neville

Emma ShanleyPublicationsA Treatise on Money – 1930 BestsellerThe General Theory of

Emma ShanleyFiscal PolicyGovernment controlled tax levels and public spending. E.g. an economy

Emma ShanleyThe Theory of the MultiplierInjection of money into a business.Creates

Emma ShanleyThe Liquidity Preference Theory of Interest RatesRate of Interest fixed

Emma ShanleySaving and InvestmentsSavings and Investments were not equal to each

Emma ShanleyExam Question Examples2002 section A

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