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A more stable gold standard monetary system can be one of the solutions used to help the economy. However, given the lack of gold during the Opium War and the shortage of silver, the Qing government was not able to import gold at the time. Even so, the stable gold standard is a good way to develop a strong economic foundation. However, the Qing government should have stabilized the silver price so as to prevent inflation and deprecation.
Lijin was a system of taxation during the Taiping Rebellion in Qing China. The Qing government used this in order to expand the military budget and to collect more in taxes from the people. It was a 1% tax and was levied on all commercial transactions. As the tax became more widely practiced throughout the country, the rate would tend to vary from one place to another. In one district, it would be one percent. In another district, it could be twenty percent. Regardless, the taxe rates as they existed helped the Qing government to collect money during hard times. At the same time, Xian Feng should have known that this would put negative pressure on economic development. When people have to pay more taxes, it actually ends up reducing the level of competition in the Chinese market. Because the Lijin policy is only designed for the Chinese goods and commercial activities, the beneficiary is the British and any other foreigners that dealt goods under unfair treaties. When the Qing government faced this financial difficulty, the issuing paper money made things even worse as it related to the financial deficit.
Another serious problem with the Qing officials of that way was corruption. In the western part of the country, there was corruption involving British officials. Those officials were able to earn extra money by serving multiple trade posts at the same time and thus they were able to collect money multiple times. "Since these extra salaries were limited by the statues, there were much smaller than Qing Officials in China." (Shawn Ni) A corrupt official could maximize the rents from the local farmers and also maximize the tax. Thus, this is a good model to address current problem. The Qing government should have strictly punished the corrupt officials and limited their power. Because of the financial crisis that occurred, the Xian Feng emperor should have reduced those officials' income and also cut the amount due from the taxpayers.
According to the theory...
Both Keynes and Kalecki use Marx's theories as a starting point but quickly moved into new ways of thinking, particularly with regard to effective demand being oriented toward the demand-side. Marx had remained rooted in supply-side demand function, rejecting Say's Law only to note that demand did not necessarily meet supply. Works Cited: Marx, K. (1867). Das kapital: A critique of political economy. Mandel, E. (1995). Marx's theory of crises. International Viewpoint.
Economic Theory Since the Great Depression, many Keynesian economists have been arguing that their basic approach is the best way to deal with issues that could have a long-term impact on the economy. At the heart of this basic philosophy, is the belief that when spending in the private sector is stagnant, the public segment can be able to deal with these challenges. The reason why, is because the government
Effective measurement of economic performance and when the government should stay (or not stay) out of things is discussed at the end of the chapter. Chapter 16 Web Activities 1. Economist Russ Roberts and filmmaker John Papola have created a video of a rap-off between economists John Maynard Keynes and F.A. Hayek. View the video at http://www.econstories.tv/. Read the lyrics on the same page, and then read the line-by-line discussion of
At which point, they would consume even more of the different services that are being provided. This would have an impact on spending, as consumers would use the added savings to purchase additional services from the company. This shows that the character of human wants requires giving customers greater value. Once this takes place, is when they will begin to purchase other products. As a result, the assumptions about
Even when forced to rework his model to allow for some private investment, he argued that it wasn't as efficient as government spending because private investors would be less likely to undertake/overpay for unnecessary works in hard economic times" (Beattie 2010). For the world to extricate itself from the Great Depression, said Keynes, the government must intervene in the market. Keynes' rationale is one reason that the current administration's stimulus
When there is no obvious solution to a particular problem, the recommended course was to extend the Neoclassical paradigm by incorporating new concepts into it that would make the subject matter amenable to economic analysis" ("The Chicago School," 2006, the New School) Recessions are short-term pain that can cause long-term gain, provided people 'wait them out' and provided the government has a minimal role in the economy, except to
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