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Modern Economics Theories

Modern Economics Theories. Vugar Bayramov , www.cesd.az. Economics ( Management of Household ) studies; Production Distribution Consumption. Economics aims; . to explain how economies work and how economic agents interact.

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Modern Economics Theories

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  1. Modern Economics Theories VugarBayramov, www.cesd.az

  2. Economics (Management of Household) studies; • Production • Distribution • Consumption

  3. Economics aims; • to explain how economies work and how economic agents interact. • To apply throughout society, in business, finance and government, but also in crime education and etc.

  4. Common distinctions between; • Positive economics (describing "what is") and normative economics (advocating "what ought to be") • Economic theory and applied economics • Mainstream economics more "orthodox" dealing with the "rationality-individualism-equilibrium nexus") and heterodox economics (more "radical" dealing with the "institutions-history-social structure nexus") • Microeconomics ("small" economics) examines the economic behavior of agents macroeconomics ("big" economics), unemployment, inflation, monetary and fiscal policy for an entire economy.

  5. Classic Economics • Adam Smith; • the effective birth of economics as a separate discipline; • Identification of land, labor, and capital as the three factors of production and the major contributors to a nation's wealth; • Ideal economy is a self-regulating market system that automatically satisfies the economic needs of the populace

  6. Classic Economics David Ricardo • Focusing on the distribution of income among landowners, workers, and capitalists. • An inherent conflict between landowners on the one hand and labor and capital on the other. • Growth of population and capital, pressing against a fixed supply of land, pushes up rents and holds down wages and profits.

  7. Marxist • Labour theory of value- the value of a thing was determined by the labor that went into its production. Neoclassical economics Alfred Marshall • Systematization of supply and demand as joint determinants of price and quantity in market equilibrium; • Supply and demand affecting both the allocation of output and the distribution of income

  8. Keynesian economics • National income in the short run when prices are relatively inflexible. • Explaination in broad theoretical detail why high labour-market unemployment might not be self-correcting due to low effective demand

  9. Chicago School of economics • Free market advocacy and monetarist ideas • Market economies are inherently stabel • Great Depression was result of a contraction of the money supply, controlled by the Federal Reserve, and not by the lack of investment as Keynes

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