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In the case of any TWO of the following economists, outline TWO contributions which each one has made to the development of economic ideas: Adam Smith; Alfred Marshall; John Maynard Keynes; Milton Friedman. - Leaving Cert Economics - Question (c) - 2007
Question (c)
In the case of any TWO of the following economists, outline TWO contributions which each one has made to the development of economic ideas: Adam Smith; Alfred Marsh... show full transcript
Worked Solution & Example Answer:In the case of any TWO of the following economists, outline TWO contributions which each one has made to the development of economic ideas: Adam Smith; Alfred Marshall; John Maynard Keynes; Milton Friedman. - Leaving Cert Economics - Question (c) - 2007
Step 1
Adam Smith Contributions
Answer
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Theory of Value: Adam Smith introduced the concept that the value of a commodity is determined by its utility and demand. This laid the foundation for understanding market dynamics and price formation.
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Division of Labor: He emphasized the benefits of dividing work into specific tasks, which enhances productivity. This principle drives modern economic practices and supports the efficiency of production.
Step 2
John Maynard Keynes Contributions
Answer
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National Income and Full Employment: Keynes argued that government intervention is essential to address unemployment. He believed that active economic policies could help maintain full employment and economic stability.
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Liquidity Preference Theory: He proposed that public preference for liquidity influences interest rates. This theory outlines how money supply and its role in the economy can manage economic fluctuations.