04 Jun Question Suppose that you were in business and inten
Question
Suppose that you were in business and intended to build a plant to turn out a promising new item—say, a pencil that would last twice as long as the kinds available now. What sorts of developments might discourage you from making this investment? How much would your final decision hinge on what you anticipated for the future, compared with what you knew to be the situation today?
How can the money you put into a bank get back into someone’s hands as his or her income? The money you put into a newly formed business? The money you put into insurance?
If your income (or your parents’) were suddenly reduced to half, by how much would your expenditures fall? What sorts of businesses would be hit by your reduced spending? Would they, in turn, curtail their expenditures?
. Why are market structures so important? What poli- cies make sense to you with regard to the U.S. wheat or corn markets? What about the automobile or air- plane markets? Why do you (we hope!) choose different policies for each? What about new inventions, such as computers, antibiotics, or toothpastes? Is some sort of regulation needed here too? If not, why not?
.What would invalidate the idea that government spend-ing is a proper and useful policy for a capitalist economy? What would validate it? Does the impact of World War II on the economy provide such a test? Why or why not?
Managerial capitalism is a phrase we hear less today than in the Golden Age. Why do you suppose it has dropped out of fashion? What changes do you think might bring it back?
The three preceding questions are very difficult to answer. However, they serve a purpose in making us think. Here is a fourth equally difficult—and thought- provoking—question: What do you think is different about today’s economic situation and that described in this chapter?
http://www.tiberiumwars.com/blahdocs/uploads/0136080693makingecono_2483.pdf – here is the link from the book to help with the answers
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