ADMS 1010 Chapter Notes - Chapter 5: Invisible Hand, Money Supply, Totalitarianism

• School: York University
• Department: Administrative Studies
• Course: ADMS 1010
• Professor: N/ A

Document Summary

Division of labour, factors of production, self-interest, invisible hand. Individuals" efforts to maximize their own gains in a free market may benefit society, even if the ambitious have no benevolent intentions. In a market-based economy, a person"s self-interest plays a direct role in lifting others in society. Marginal = the margin or edge of units produced. No participant is large enough to have market power. Judge reality based on how close they get to this like-this-theory. Develop political ideology based on presumed interdependency between market relations and democratic freedom. Belief that market freedom and democratic freedom are mutually interdependent. The support for privatization, free trade, open markets, deregulation, decrease of government involvement in the economy. More money -> more freedom -> more choices. Emphasizes the role of governments in controlling the amount of money in circulation. Expansion of money supply leads to inflation; governments should focus on price stability.