Alphabet economy R.Stroup, Dzh.Gvartni -

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Uploaded: 26.10.2002
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TABLE OF CONTENTS

Part I.
Ten main ideas of economics

Incentives affect behavior
Total to pay
Trade is always helpful
Barriers to trade harm
Revenues are defined production
Four sources of income growth
Personal income has a reward for services rendered by others
Profit motivates businesses to work for social welfare
The principle of the "invisible hand": market prices direct self-interest for the common good
Neglect side effects
Part II.
Seven sources of economic progress

Private property: people work hard and better use of resources, where the property is private
Freedom of exchanges: the political measures against the exchange, constrain economic growth
Competition: competition forces to capitalize on the resources and is a constant source of progressive innovations
Capital market: in order to make rational use of its resources, the country should have a mechanism for channeling capital into efficient production
Financial stability: inflation distorts price signals and undermining the market economy
Low taxes: the more money is available to people, the more they produce
Freedom of foreign trade: country benefits by selling goods produced cheaply and buying goods with the money that it is expensive to produce
Part III.
Economic progress and the role of the state

The state protects the rule of law and provide benefits that society can get "in the market", promotes the welfare of the country, but ...
The state - not a stop-gap for each barrel. It can not be used to correct all the flaws of society
Price of state tax
Interest groups can use the political mechanism of the state, to rob taxpayers and consumers
The state often creates a budget deficit threatens economy
Reallocation of society contributes to the state of their plundering
The costs of income redistribution is much greater than the benefits of those who are meant to reallocate funds
Central planning - only the substitution of the power market of political power, leading to empty waste of resources and economic decline
Competition between authorities is as important as competition among firms competition authorities among themselves and with private enterprise makes governments better serve people
Constitutional provisions should ensure the harmonious combination of democracy with a strong economy
NOTES

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