Economic Exam 2 Essay Example | Topics and Well Written Essays - 500 words

Economic Exam 2 - Essay Example For example, he proposed a theory in regard to labor and value (Schumpeter 21). Schumpeter came up with a theory based on Marx capitalism principles in which he stated that economies can evolve, create new structures and destroy old structures. In his view governments posed the greatest risk when it comes to economy destruction (Schumpeter 59). He was right because, most government evolved from communist or monarchies to democratic governments but still go to war with each other. Keynes’ theory on macroeconomics also known as Keynesian economics focuses on the total expenditure in an economy and the effect the expenditure has on inflation and an economy’s output (Kennedy 196). In Keynesian economics, decisions made by both public and private institutions affect the output of an economy. Classical theory of economics has it basis centered on the concept of free-market economies. The main difference between the two economic theories is the influence of government on an economy. The Keynesian economic theory is reliant on the expenditure and policies of governments but the classical economic theory makes the assumption that there is a free-market (Kennedy 199). Another difference between the two theories is that Keynesian economics theory works on providing short-term results for an economy while classical economic theory focuses on providing long-term solutions for economic problems. Q.4. Characteristics of Anglo-Saxon capitalism and how does it differ from European and Asian capitalism? Which is the better example of Anglo-Saxon capitalism, the U.S. economy or the British economy? The main characteristic of the Anglo-Saxon capitalism model is that it operates based on common law with a judicial system which contemplates minimal government interference in the economy (Pryor 107). The difference between the Anglo-Saxon capitalism model and the