How Does Productivity Growth Affect Labor?

Economic TheoryIntroductionThe word economicals is derived from oikonomikos , which means skilled in household management . The society is faced with the following economic problemsa . How to what to produce with limited resourcesb . How to ensure stable prices and full practice of resourcesc .How to provide a rising standard of living some(prenominal) for now and futureThe Hellenic School of economic theory began with the proceeds in 1776 of Adam smith s monumental work , The wealthiness of NationsThe book identified land , labor , and capital as the three factors of exertion and the major contributors to a nation s wealth . In Smith s view , the ideal economy is a self-regulating food market system that automatically satisfies the economic involve of the populationHe described the market mechanism as an invisible ease up that leads all individuals , in pursuit of their own self-interests , to produce the great benefit for society as a wholeWhile Adam Smith emphasized the production of income , David Ricardo focused on the distribution of income among landowners , workers , and capitalists . Ricardo aphorism a conflict between landowners on the one wad and labor and capital on the other . He posited that the gain of population and capital , pressing against a fixed affix of land , pushes up rents and holds down wages and makes unadulterated economists theorized that prices are determined by the costs of productionMarginalist economists emphasized that prices likewise depend upon the level of demand , which in turn depends upon the amount of consumer satisfaction provided by individual goods and servicesMarginalists provided modern macroeconomics with the basic analytical tools of demand and supply , consumer utility , and a mathematical cloth for using those tools . Marginalists also showed that in a free market economy , the factors of production -- land , labor , and capital -- get returns equal to their contributions to production .

This principle was sometimes used to rationalise the existing distribution of income : that people earned exactly what they or their property contributed to productionAn advocate of a labor theory of regard as , Marx believed that all production belongs to labor because workers produce all nurse within society . He believed that the market system allows capitalists , the owners of machinery and factories , to crusade workers by denying them a fair share of what they produce . Marx predicted that capitalist economy would produce growing misery for workers as competition for profit led capitalists to adopt labor-saving machinery , creating a reserve army of the sluggish who would eventually rise up and seize the means of production SummaryEconomic theories are constantly changing . Keynesian theory , with its accent mark on activist government policies to promote high profession dominated economic policymaking in the early post-war period . notwithstanding starting in the late 1960s , troubling puffiness and lagging productivity prodded economists to look for new solutions . Supply-side Economics recalls the Classical School s concern with economic growth as a fundamental prerequisite for improving society s material eudaimonia . It emphasizes the need for incentives to save and invest if the nation s economy is...If you loss to get a full essay, order it on our website: Ordercustompaper.com

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