Everyone Should Know About Economics And Prosperity (Book Report Sample)
Common Sense Economics 3rd edition, What everyone should know about economics and prosperity, Gwartney-Stroup.source..
Common Sense Economics
In Common Sense Economics Gwartney & Stroup (2016) reinforce the idea that nations need people who are literate in economics to be prosperous over time. Rather than highlight new ways of thinking the book explores economic principles, and reinforce the foundations to spur new ways of thinking. Gwartney & Stroup (2016) highlighted the key elements of common sense economics and they are mostly tied concepts of free market economics. The book is divided into four parts beginning with the key elements in economics, the major sources of economic progress the role of government and practical personal finance. As more people get the basic understanding of economics this benefits them individually and collectively as they make decisions associated with the efficient use of resources. An informed people also solve problems better as they are concerned with getting the optimal solutions. In free markets there is clear separation of the private and public goods, this helps in the efficient allocation of resources.
While policy makers have good intention when formulating policies what should be considered is effectiveness and this extends to the likely impact of market failure. Those proposing the policies only focus on the intentions sometimes ignoring the unintended consequences. The intentions of the collectivist governments have focused on equality and fairness, but such societies have often restricted wealth creation and inequality still exists. This example highlights the difference between intention and performance where the powerful establishments fail to work for the people despite the leaders stated aims. Similarly, among the policy makers this plays out when deciding on taxation (Gwartney & Stroup).
To Gwartney & Stroup (2016) the free market based system is the best option and yet it is straightforward. One of ideas they advance is that there are no free things, and it is important to have incentive in business decision making. The case for free trade is that it promotes progress, as more people are employed when there is efficient allocation of resources. There is mutual gain when there is free trade as partners specialized on certain costs and services. The invisible hand of market prices has been found to be the most effective in meeting the demand and supply. This contrasts with economic systems where there are restrictions including price control, as the economy is in efficient and less competitive. Even though, the role of market forces in the economy affects the welfare of the people since economic expansion influences the peoples
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