History of Economic Thought Essay

(1) In the article of Allen et al. The Foundations of Free Enterprise, the three types of sparing system were discussed. In a traditional economic system, the wholeocation of resources is base on social customs, culture, and to some extent, ghostly traditions. The distribution of the fruits of production is primed(p) by traditional criteria such as age, sex, and other psyche qualities that argon not essentially related to personal productivity. Primitive, agrarian, and less-developed societies mostly fall on this category.Many traditional economies progressed into a mart economic system, wherein the allocation of resources is keep in lineled by private individuals and businesses. The individuals make independent decisions that reflect their best interest, affecting the market demand, product supply, the price of products, and the kinds of goods and services produced. Business competition could be tight, cause some businesses to close down and unemployment to rise. Meanwhile, the government has only minimal control over the individual and business decisions, interfering only when needed.This often results in unequal distribution of resources, which causes poverty to emerge. Conversely, in a command or authoritative economic system, the allocation of resources is directed by the government. The government operates all the industries, determines what goods and services to be produced, how they will be to produced, how they will be shared among the people, and decides how to utilize the talents and skills of its workers. Hence, equal distribution of resources is enforced at the expense of individual freedom.2) The bar Theory of Money (QTM) was developed during the 16th century in an attempt to explain why amber and silver inflow into the U. S. and atomic number 63 caused the price levels to change magnitude. Schenk, in his article on money, reports that after minting the large amounts of gold and silver from the Aztec and Incan empires which were brough t back to Spain by the conquistadors, the amount of money in circulation went up. The price levels, at the same time, gradually started their slow, century-long rise.Economists such as heat content Thornton were led to assume that more money equals more inflation and an increase in money supply does not necessarily mean an increase in economic output (cited in the article of Heakal on What is the Quantity Theory of Money). Thus, a direct relationship was established between the standard of money in an economy and the price levels of goods and services. For instance, when the amount of money in circulation doubles, price levels alike double, which causes inflation, i. e. the rate at which the price level escalates. This convey that the consumer pays twice as much for the same amount of the good or service. (3) Christianity taught faith in reason as the greatest gift of graven image to man. This stimulated the pursuit of science and democratic practice which gave rise to capitali sm. Christian theologians also theorized about the nature of equality and individual rights, which is a bluster of capitalism. Christianity also fostered actual progress in terms of technical and organizational innovations.During the gallant times, the church was the largest landowner in Europe, and much of the profit went to the religious orders to pay for liturgical services. The rapid innovation in agricultural applied science yielded large profits, causing the church to reinvest profits to increase production and diversified. It also led the church to hire more labor force. Hence, based on this information, it is safe to conclude that the church has largely contributed to the rise of capitalism during the medieval period (Stark, B11).