Essays on Neoclassical and Keynesian State Approach to Economy Assignment

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The paper "Neoclassical and Keynesian State Approach to Economy" is a great example of a business assignment. Neoclassical theory or the theories of policies of the new right deals majorly on the issues of income, price as well as output determination as far as the distribution of the market is concerned through the supply and demand. This kind of process is usually mediated by utility maximization through individual constrained incomes of the profits. A number of factors such as production and the available information affect the process. It is this theory that completely dominated the area of microeconomics all over the world but in conjunction with the Keynesian theory, they make up the synthesis neoclassical a theory that is the main dominant in the economics mainstream (Dimand, 1988, pp.

87). This theory is characterized by a number of approaches namely the existence of rational preferences especially with reference to the outcome used to identify as well as associate value, utility maximization of the individuals as well as the maximization of the firms profits and finally the issue of individual diversity in their actions towards the relevance as well as the fullness of the information received.

This theory also put so much emphasis on the issue of equilibrium. This school of thought differs from others in the sense that its subjectivity, modelling absence and praxeological methods are different as compared to the other theories. It is known to have the most realistic perspective as far as the uncertainty is concerned and its role in the system of economics is concerned, with reference to the uncertainty, the two theories, Keynesian and Austrian, differing in terms of the significances of money, time, and ignorance.

According to the school of thought presented by the theory, there are two uncertainties namely the faulty perceptions and the specificity of the event (Clark, 1998, pp. 69). According to the theory, it is the responsibility of the entrepreneur to ensure there is a situation of competition. This theory defines that perfect competition comes up due to existing differences in the creation of wealth as fart as the issue of resource allocation is concerned.

References

Antonietta, C. (1987). Marginal economics. The New Palgrave: A Dictionary of Economics, 3, p. 323.

Clark, B. (1998). Principles of political economy: A comparative approach. Westport, CT: Praeger.

Dimand, R. (1988). The origins of the Keynesian revolution. Stanford: Stanford University Press. p. 117.

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