Economic Principles of Production and Consumption
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Questions and Answers

What is the primary function of money in the economy, according to Louis Kelso?

  • To measure economic input, outtake, and relative values (correct)
  • To provide a physical factor of production
  • To consume goods and services
  • To accumulate claims against others

    • What is the consequence of the current money creation and credit extension system?

  • The rich have limited access to capital credit
  • The rich maintain their wealth, while the poor and middle-class struggle (correct)
  • The poor and middle-class have access to low-cost credit
  • Consumer credit is restricted to the wealthy

    • According to the content, what is a characteristic of the visible sector of the economy?

  • It includes productive enterprises, goods, and services (correct)
  • It is a system of symbols
  • It is a physical factor of production
  • It is a part of the monetary system

    • What is the result of the lack of access to capital credit for the poor and middle-class?

    <p>They are forced to rely on consumer credit</p> Signup and view all the answers

    What is the main reason why certain commodities do not sell, according to Say's Law of Markets?

    <p>Because others are not produced</p> Signup and view all the answers

    What is the relationship between money and the economy, according to Kelso?

    <p>Money is a system of symbols that measures economic activity</p> Signup and view all the answers

    What is the implication of the statement 'you need money to make money'?

    <p>Lenders require collateral from borrowers</p> Signup and view all the answers

    What is the consequence of rising levels of consumer credit, according to the text?

    <p>Rapidly increasing debt burden on individuals and households</p> Signup and view all the answers

    What is the consequence of the current monetary system on global economic inequality?

    <p>It perpetuates and exacerbates economic inequality</p> Signup and view all the answers

    What is the result of the flawed paradigms that lead to false dichotomies, according to the text?

    <p>The State applies its coercive powers of regulation and redistribution</p> Signup and view all the answers

    What is the primary reason why the majority of people on the planet have no legitimate ownership claim to what technology can generate?

    <p>Insufficient means to purchase</p> Signup and view all the answers

    What is the primary purpose of the monetary system, according to Kelso?

    <p>To measure economic activity</p> Signup and view all the answers

    What is the consequence of the small minority of people who own and control most of the productive instruments of society?

    <p>They produce more than they can humanly consume</p> Signup and view all the answers

    What is the result of the imbalance between the power to produce and the power to consume?

    <p>Rising levels of consumer credit</p> Signup and view all the answers

    What is the relation between future disposable income and consumer credit, according to the text?

    <p>Future disposable income is reduced to pay off consumer credit</p> Signup and view all the answers

    What is the underlying problem that leads to global economic inequality, according to the text?

    <p>The imbalance between the power to produce and the power to consume</p> Signup and view all the answers

    What is a major consequence of the widening gap in economic power and ownership between the rich and poor?

    <p>Billions of people starving, homeless, and with little hope for their futures</p> Signup and view all the answers

    According to the Chemical & Engineering News “Special Report” in 1972, what are some of the key issues contributing to environmental degradation and societal problems?

    <p>Environmental degradation, affluence that is only an illusion for many, war, and the capital-labor conflict</p> Signup and view all the answers

    What is a common defect of both capitalism and socialism that affects most human beings?

    <p>Lack of ownership of the means of production</p> Signup and view all the answers

    What is a consequence of the system that forces a man to fight for a job on an environmentally destructive project?

    <p>Unresponsive institutions and social unrest</p> Signup and view all the answers

    What is a characteristic of the global economy that affects many citizens?

    <p>Vulnerability to loss of jobs and income, and being trapped by consumer debt</p> Signup and view all the answers

    What is a consequence of the consumer who can’t afford to pay for the pollution control costs that will inevitably be passed on to them?

    <p>Increased economic inequality and social unrest</p> Signup and view all the answers

    What is a fundamental principle that could guide us in restructuring the laws and institutions that govern our lives?

    <p>Fostering peace, prosperity, and a healthy environment for every person on the planet</p> Signup and view all the answers

    What is a consequence of the vast majority of citizens becoming powerless wage slaves, workers who are now merely disposable assets in the global economy?

    <p>Social unrest, terrorism, and war</p> Signup and view all the answers

    What is the primary reason for the imbalance between the power to produce and the power to consume?

    <p>The majority of people on the planet have insufficient means to purchase what technology can generate.</p> Signup and view all the answers

    What is the consequence of rising levels of consumer credit on individuals and households?

    <p>It increases the debt burden on individuals and households.</p> Signup and view all the answers

    What is a consequence of the flawed paradigms that lead to false dichotomies?

    <p>It results in a widening gap in economic power and ownership between the rich and poor.</p> Signup and view all the answers

    What is the relationship between the power to produce and the power to consume, according to Say's Law of Markets?

    <p>The power to produce overwhelms the power to consume.</p> Signup and view all the answers

    What is a consequence of the small minority of people who own and control most of the productive instruments of society?

    <p>It results in a widening gap in economic power and ownership between the rich and poor.</p> Signup and view all the answers

    What is the result of the lack of access to capital credit for the poor and middle-class?

    <p>It results in a widening gap in economic power and ownership between the rich and poor.</p> Signup and view all the answers

    What is a consequence of the flawed paradigms that lead to false dichotomies on environmental degradation?

    <p>It exacerbates environmental degradation and societal problems.</p> Signup and view all the answers

    What is the relationship between future disposable income and consumer credit?

    <p>Future disposable income decreases as consumer credit increases.</p> Signup and view all the answers

    What is a primary consequence of the widening gap in economic power and ownership between the rich and poor?

    <p>Increased poverty and social unrest</p> Signup and view all the answers

    What is a major contributor to environmental degradation, according to the Chemical & Engineering News “Special Report” in 1972?

    <p>Affluence and consumerism</p> Signup and view all the answers

    What is a consequence of the system that forces a man to fight for a job on an environmentally destructive project?

    <p>Environmental degradation and social unrest</p> Signup and view all the answers

    What is a characteristic of the global economy that affects many citizens?

    <p>Vulnerability to loss of jobs and income, and trapped by consumer debt</p> Signup and view all the answers

    What is a consequence of the vast majority of citizens becoming powerless wage slaves, workers who are now merely disposable assets in the global economy?

    <p>Social unrest and loss of human dignity</p> Signup and view all the answers

    What is a common defect of both capitalism and socialism that affects most human beings?

    <p>Lack of ownership of the means of production</p> Signup and view all the answers

    What is a fundamental principle that could guide us in restructuring the laws and institutions that govern our lives?

    <p>Peace, prosperity, and a healthy environment for every person on the planet</p> Signup and view all the answers

    What is a consequence of the consumer who can’t afford to pay for the pollution control costs that will inevitably be passed on to them?

    <p>Social unrest and loss of human dignity</p> Signup and view all the answers

    What is the primary function of money, according to Louis Kelso's definition?

    <p>A yardstick for measuring economic input and outtake</p> Signup and view all the answers

    What is the consequence of the current money creation and credit extension system on the poor and middle-class?

    <p>They are restricted to high-cost and high-risk credit</p> Signup and view all the answers

    What is the relationship between the visible sector and the monetary system, according to Kelso?

    <p>The monetary system is a part of the invisible sector, and its adequacy can only be measured by its effect on the visible sector</p> Signup and view all the answers

    What is the consequence of the lack of access to capital credit for the poor and middle-class on the environment?

    <p>It contributes to environmental degradation and unsustainable consumption</p> Signup and view all the answers

    What is the relationship between consumer credit and global economic inequality?

    <p>Consumer credit perpetuates global economic inequality by keeping the poor in debt</p> Signup and view all the answers

    What is the consequence of the current monetary system on global health crises?

    <p>It perpetuates global health crises by limiting access to healthcare for the poor and middle-class</p> Signup and view all the answers

    What is the relationship between consumerism and debt, according to the content?

    <p>Consumerism leads to debt and perpetuates global economic inequality</p> Signup and view all the answers

    What is the underlying problem that leads to global economic inequality, according to the content?

    <p>The lack of access to capital credit and the perpetuation of the current monetary system</p> Signup and view all the answers

    Study Notes

    Critique of Economic Systems

    • Jean-Baptiste Say's conclusion: "As no one can purchase the produce of another except with his own produce, the more we can produce, the more we can purchase."
    • Corollary: If certain commodities do not sell, it is because others are not produced, and it is the raising of produce alone that opens a market for the sale of produce.

    Imbalance in Ownership and Consumption

    • Most people have no legitimate ownership claim to or means to purchase what technology's productive capacity can generate.
    • A small minority owns and controls most productive instruments, producing more than they can consume.
    • Say's Law of Markets: "The power to produce overwhelms the power to consume."

    Consumer Credit and Debt

    • Rising consumer credit creates a temporary burst of purchasing power, but increases debt burden and reduces future disposable income.
    • Borrowing to make up the shortfall creates a cycle of debt.

    Definition of Money

    • Money is not part of the visible sector of the economy, but a yardstick for measuring economic input, outtake, and relative values.
    • Money provides a means of measuring obligations, rights, powers, and privileges.
    • It is a system of symbols that can be substituted for the visible sector, losing sight of the fact that a monetary system is part of the invisible sector.

    Inequality in Access to Credit

    • Consumer credit is available to most, but access to capital (productive) credit is restricted to those with collateral (the rich).
    • The poor and middle-class get high-risk and high-cost credit, while the rich get low-cost and low-risk credit.
    • Lenders only extend capital credit to those with assets, perpetuating inequality.

    Global Economic Inequality

    • A gap in economic power and ownership widens between the rich and poor within and between nations.
    • Billions remain starving, homeless, and without hope for their futures despite the world's productive capacity.

    Consequences of One-Factor Economic Theory

    • Environmental degradation, affluence that is only an illusion for many, war, capital-labor conflict, and unresponsive institutions.
    • Consumer debt and lack of affordable pollution control costs.

    The Need for a New Paradigm

    • The current economic system fails to provide for the majority of citizens.
    • It is time to rethink paradigms, assumptions, and systems to bring about peace, prosperity, and a healthy environment for all.

    Critique of Economic Systems

    • Jean-Baptiste Say's conclusion: "As no one can purchase the produce of another except with his own produce, the more we can produce, the more we can purchase."
    • Corollary: If certain commodities do not sell, it is because others are not produced, and it is the raising of produce alone that opens a market for the sale of produce.

    Imbalance in Ownership and Consumption

    • Most people have no legitimate ownership claim to or means to purchase what technology's productive capacity can generate.
    • A small minority owns and controls most productive instruments, producing more than they can consume.
    • Say's Law of Markets: "The power to produce overwhelms the power to consume."

    Consumer Credit and Debt

    • Rising consumer credit creates a temporary burst of purchasing power, but increases debt burden and reduces future disposable income.
    • Borrowing to make up the shortfall creates a cycle of debt.

    Definition of Money

    • Money is not part of the visible sector of the economy, but a yardstick for measuring economic input, outtake, and relative values.
    • Money provides a means of measuring obligations, rights, powers, and privileges.
    • It is a system of symbols that can be substituted for the visible sector, losing sight of the fact that a monetary system is part of the invisible sector.

    Inequality in Access to Credit

    • Consumer credit is available to most, but access to capital (productive) credit is restricted to those with collateral (the rich).
    • The poor and middle-class get high-risk and high-cost credit, while the rich get low-cost and low-risk credit.
    • Lenders only extend capital credit to those with assets, perpetuating inequality.

    Global Economic Inequality

    • A gap in economic power and ownership widens between the rich and poor within and between nations.
    • Billions remain starving, homeless, and without hope for their futures despite the world's productive capacity.

    Consequences of One-Factor Economic Theory

    • Environmental degradation, affluence that is only an illusion for many, war, capital-labor conflict, and unresponsive institutions.
    • Consumer debt and lack of affordable pollution control costs.

    The Need for a New Paradigm

    • The current economic system fails to provide for the majority of citizens.
    • It is time to rethink paradigms, assumptions, and systems to bring about peace, prosperity, and a healthy environment for all.

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    Quiz about the economic principles of production and consumption as explained by Jean-Baptiste Say and Thomas Malthus.

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