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Mercantilism was an early form of capitalism where the economy was largely controlled by the state.
Mercantilism was an early form of capitalism where the economy was largely controlled by the state.
True
Adam Smith is known as the 'father of economics' and his work 'The Wealth of Nations' laid the groundwork for free-market economic theory.
Adam Smith is known as the 'father of economics' and his work 'The Wealth of Nations' laid the groundwork for free-market economic theory.
True
Monopoly capitalism saw companies consolidating and monopolizing industries, which led to increased wealth inequality.
Monopoly capitalism saw companies consolidating and monopolizing industries, which led to increased wealth inequality.
True
David Ricardo's principle of comparative advantage explains how protectionism benefits all parties.
David Ricardo's principle of comparative advantage explains how protectionism benefits all parties.
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John Maynard Keynes advocated for minimal state intervention in the economy to achieve economic stability.
John Maynard Keynes advocated for minimal state intervention in the economy to achieve economic stability.
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Finance capitalism emphasizes the role of government over investment and banking activities in the economy.
Finance capitalism emphasizes the role of government over investment and banking activities in the economy.
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Friedrich Hayek's work 'The Road to Serfdom' supports the idea of state-led economic planning.
Friedrich Hayek's work 'The Road to Serfdom' supports the idea of state-led economic planning.
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Keynesian economics emerged following the Great Depression and emphasized demand-side economic policies.
Keynesian economics emerged following the Great Depression and emphasized demand-side economic policies.
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Milton Friedman was a key figure in promoting deregulation, privatization, and free-market principles in neoliberal capitalism.
Milton Friedman was a key figure in promoting deregulation, privatization, and free-market principles in neoliberal capitalism.
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Neoliberal capitalism has been influential from the early 20th century to the present day.
Neoliberal capitalism has been influential from the early 20th century to the present day.
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Study Notes
Factors that Influence Economic System
- The type of economic system adopted by a country is influenced by multiple factors.
Historical and Ideological Background
- Mercantilism (16th to 18th century) was an early form of capitalism where the economy was largely controlled by the state, and wealth was accumulated through trade and colonization.
- The Industrial Revolution (18th to 19th century) laid the groundwork for free-market economic theory.
- Adam Smith, known as the "father of economics," proposed the idea of the "invisible hand" in his work "The Wealth of Nations" (1776), where individual self-interest indirectly promotes the good of society.
- David Ricardo's principle of comparative advantage explained how trade can benefit all parties, even when some are more efficient in the production of all goods.
- Monopoly Capitalism (late 19th century to early 20th century) led to increased wealth inequality, with companies consolidating and monopolizing industries.
- Finance capitalism emerged during this period, with investment and banking activities playing a major role in the economy.
- Keynesian economics (mid-20th century) advocated for state intervention in the economy to achieve full employment and economic stability, as promoted by John Maynard Keynes in his work "The General Theory of Employment, Interest and Money" (1936).
- Neoliberal Capitalism (late 20th century to present) promoted deregulation, privatization, and free markets, led by key figures Friedrich Hayek and Milton Friedman, and influenced by their works such as "The Road to Serfdom" (1944), "Capitalism and Freedom" (1962), and "Free to Choose" (1980).
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Description
This quiz explores the factors that influence the type of economic system adopted by a country, including historical and ideological background, and delves into the brief history of capitalism, from mercantilism to the industrial revolution.
