Study Guide_Test 2

Study Guide_Test 2 - Travis Kennedy THE AUSTRIAN SCHOOL...

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Travis Kennedy THE AUSTRIAN SCHOOL Lecture 37. List and explain in a sentence or two the four characteristics of Austrian economics: 3 -. i. Methodoligical Individualism : Austrians place heavy emphasis on the idea that “social” developments are simply the aggregation of individual actions. ii. Praxeology : The science of human action, it is based on the belief that economic behavior is governed by laws that are logically derived from principles of human action beginning with the idea that every conscious action is intended to improve a person’s satisfaction. iii. Markets as creators of knowledge : Austrians see market participants as individuals handicapped by lack of knowledge. Markets create knowledge for these stumbling bumbling individuals by providing rules and signals. iv. Process : Austrian economics focuses on the processes within market systems rather than end points or equilibrium. Society for the Development of Austrian Economics: http://it.stlawu.edu/sdae/ 38. Go to the web page for the SDAE (linked above). Find their statement of purpose. What is their purpose and what does this include? [72 words] Mair and Miller: A Guide to Modern Economic Thought, Chapter Three 39. What are Menger’s universal principle and originating cause? [6 words] -Cause and effect and human needs 40. Everything in Menger is to be considered a result of what (and what)? [17 words] Everything to be considered is a consequence of human needs, and of the attempts by conscious and reasoning beings to meet those needs. 41. Why does Austrian economics not concentrate on the concept of the good (as does Neoclassical, for example)? [25 words] -Whether or not something becomes a good depends on the perception of the individual that something is capable of meeting a need and the individual’s power to employ it for that purpose. Because this knowledge is personal and cannot be known by the researcher, there is no way to start at that point. 42. What does Menger identify as the principal cause of economic progress? Briefly explain his logic. [53 words] -The increase of knowledge; especially the knowledge of causal between things and human welfare. A skill or good cannot become a good unless it is recognized as a means of satisfying a specific need of a specific individual. Therefore, goods are a consequence of knowledge. 43. Austrians believe that the laws of economics they develop are not to be tested, but are instead are
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established truths. How do they justify the latter? [37 words] -They believe that a valid argument based on premises that we know are true must, logically, be true. And we know the premises to be true because we have direct, personal knowledge of our own human situation. THE POST KEYNESIAN SCHOOL
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This test prep was uploaded on 04/21/2008 for the course ECON 30233 taught by Professor Harvey during the Spring '08 term at TCU.

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Study Guide_Test 2 - Travis Kennedy THE AUSTRIAN SCHOOL...

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