Business

DAVID RICARDO (1772-1823) Ricardo was the second great economist, who also was known for his great fiscal acumen. He made a fortune in stocks when he was young, then became an economist despite the fact that he had non attended college. In 1817 he published The Principles of Political economic system and Taxation. It put forth his two major theories. (1) The Ricardo Effect was the surmisal that when wages are higher, capital-intensive production is favored over effortful production. What does this mean? Since businesses have to pay more for their workers, theyre going to constrict more on investing in in the altogether factories and new materials (capital). (2) The theory of comparative advantage, which is the fundamental idea behind the economic science of international trade. It says that if each nation pisss the goods that they can make more or less efficiently (in some other words, they have the required natural resources, the right-hand(a) level of technology, plenty skilled laborers, etc.

to produce those goods), all nations go out benefit in the end, by trading for the goods produced by other nations. In other words, a nation shouldnt try to produce everything it needs; it should do what it does best, and count on others to do what they do best. In the end everyone is happy. Ricardo had another, less optimistic theory, although in many a(prenominal) ways he agreed with Adam Smith. He express that population keeps expanding, eventually there wont be enough food to go around, and economic growth will stop. This was like to the ideas of Thomas Malthus. Together they led to economics being called the raunchy science. If you want to get a full essay, order it on our website: Orderessay

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