Key Terms And Their Meanings Part VI
- Mill, John Stuart : (1806-73) English philosopher and political economist. In his great Principles of Political Economy (1848), he summarized the theory of the classical school of Adam Smith, Ricardo, and Malthus, and it became the basic textbook for the rest of the century. Mill also began to evolve the theory of demand and supply. Although he believed in laissez-faire and competition, he sympathized with unions and with social reform.
- Minimum Wage: A wage below which it is illegal to employ people. Mixed Economy: An economy in which there is a large private sector and a large state sector, neither of which predominates over the other. In fact, all economies of any significant size contain both a private and a state sector, although, at one extreme, the private sectors of the centrally planned economies in Eastern Europe are relatively small, while the state sector in the USA’s I economy is comparatively small. The economies of Western Europe, where the balance between e private and government enterprise is more equal, are therefore examples of mixed economies.
- Most-Favoured-Nation Clause: A provision in commercial treaties under which each signatory grants all others the benefit of any concessions it grants to a third country. The clause rules out the possibility of any preferential treatment by allowing every country to claim the most-favoured nation treatment. It constitutes the heart of GATT – a government granting a tariff concession to one member effectively grants it to all other members and in return benefits from all bargains struck. Acceptance of this principle significantly reduces the complexity of negotiations required to reduce restrictions on international trade. Ombudsman An official whose role is to investigate complaints from members of the public who claim to have suffered injustice as a consequence of maladministration by governmental departments.
- Organisation For Economic Cooperation and Development (OECD).: An organisation based in Paris, established in 1961 to assist member countries in the formulation of their economic policies and encourage them to cooperate internationally. It also acts to coordinate its members’ activities in favour of the developing countries. 24 countries are members of the OECD, including Canada, New Zealand, and most European countries. The organisation of Petroleum Exporting Countries (OPEC) A consortium of 13 countries established in 1960, which collectively control a substantial percentage of internationally exchanged crude petroleum.
- Vilfredo Federico Damaso (1848-1923): Italian economist, sociologist, and engineer. He applied mathematical techniques to economics and continued the analytical work of Walras. Pareto rejected the tradition that consumers’ preferences could be accurately calculated; consumers simply prefer certain combinations of goods to other combinations. Pareto also studied the problem of maximizing the economic well-being of society as a whole, laying the basis of welfare economics. 1959.
- Pareto-Optimal: The welfare argument states that efficiency in the allocation of resources is maximised when no redistribution of resources is available that will make some people better off without making others worse off. It is named after Vilfredo Pareto, who first propounded the idea. The argument is now widely rejected since it tends to institutionalise the status quo established by: the initial distribution of income.
- Per Capita : Per person. Thus, per capita income is the average income per person; i.e. the total income of a group divided by the number of people in the group. Progressive Tax: A tax that accounts for a higher proportion of income as income increases. For income tax, this is achieved by fixed-sum personal tax allowances (which become a smaller proportion of income as gross income rises) and rising marginal rates of tax. Compare regressive tax. I
- Punter: A gambler, especially a speculator on a stock exchange or commodity market who attempts to make quick profits by frequent dealings. Rational Behaviour: The assumption in the theory of consumer behaviour is that consumers will act in accordance to maximize their utility from a fixed money income.
- Ricardo, David : (1772-182) English economist. One of the founders of classical economics wrote The Principles of Political Economy and Taxation (1817), one of the first works to develop a theoretical economic model. In it, he explored the distribution of commodities in a primarily agricultural society with a growing population and concluded that scarcity of land would eventually end economic growth. Ricardo saw wages as the main determinant of prices and argued that free trade would benefit those concerned.
Here are the notes for Key Terms And Their Meanings Part VII.