The principles covered, one thing is clear, it is the choices we make and the freedom of these decisions to make our larger economy. The issues were: trade-offs, opportunity costs, marginal thinking, incentives, fairs, markets, governments, productivity, inflation and the Phillips curve.
Tradoffs -
Each face shortages. Gregory Mankiw of Harvard University, said: "I think the nature of the economy," People make compromises every day all decisions involve trade-offs...
Opportunity costs -
Each decision involves an opportunity cost. Even simple decisions, like not going to a baseball game or at home involves opportunity costs. The opportunity cost of going to a baseball game is the best grade in the class you have received.
Think marginal -
Reflection on the board is to create a balance where it is necessary to maximize efficiency.
Incentives -
People respond to incentives. On incentives to make decisions like humans. The example of the duty-free shops is an excellent interpretation of how people respond to incentives. With the high tax detail in some areas, a weekend of tax-free shopping sponsored by the government is an incentive, something you do not normally buy buy. It is an incentive, because it happens once a year.
Trade -
Trade can make everyone better. Countries are not self-sufficient. Countries and specialize. On the other for goods and services that would otherwise be more expensive to produce resources, or as the economy grows, the need for trade.
Markets -
Markets are a good way to organize economic activity. A market is a place where people take the exchange of regulated prices. A market economy consists of many markets, were determined on the decisions of households and firms.
Government -
Governments can sometimes markets. Markets fail or markets can not allocate resources fairly. Governments intervene to regulate or impose rules. One reason markets fail to work effectively is externality. Air pollution is an example of an externality. He charged air and the impact on people's lives. Therefore, the attacks of government to regulate markets.
Productivity -
A country's standard of living depends on its ability to produce goods and services. Differences in living standards are dramatic in some countries. Income differences reflect the quality of life. Productivity is what determines the standard of living. Training improves productivity. Economically free countries to promote the production. Research and development to improve the production rate.
Inflation -
Inflation is when the value of money decreases. Prices of goods and services increased to reflect only the increase in the money supply. Since money is no longer available, shrinks the value of it. To control inflation, made the call money rate and the rate of goods and services produced should be approximately level.
Inflation and unemployment -
The money supply to stimulate the economy and reduce unemployment, but in the long run, the inflation rate increases. However, if the money supply is reduced, unemployment falls and inflation rises. Phillips curve examines the relationship between inflation and unemployment. He explained that when inflation is high, unemployment is low and inflation is low, unemployment is high. However, the Phillips curve is a controversial topic. Over the last twenty years, the curve did not work due to low unemployment and inflation at the same time.
Tradoffs -
Each face shortages. Gregory Mankiw of Harvard University, said: "I think the nature of the economy," People make compromises every day all decisions involve trade-offs...
Opportunity costs -
Each decision involves an opportunity cost. Even simple decisions, like not going to a baseball game or at home involves opportunity costs. The opportunity cost of going to a baseball game is the best grade in the class you have received.
Think marginal -
Reflection on the board is to create a balance where it is necessary to maximize efficiency.
Incentives -
People respond to incentives. On incentives to make decisions like humans. The example of the duty-free shops is an excellent interpretation of how people respond to incentives. With the high tax detail in some areas, a weekend of tax-free shopping sponsored by the government is an incentive, something you do not normally buy buy. It is an incentive, because it happens once a year.
Trade -
Trade can make everyone better. Countries are not self-sufficient. Countries and specialize. On the other for goods and services that would otherwise be more expensive to produce resources, or as the economy grows, the need for trade.
Markets -
Markets are a good way to organize economic activity. A market is a place where people take the exchange of regulated prices. A market economy consists of many markets, were determined on the decisions of households and firms.
Government -
Governments can sometimes markets. Markets fail or markets can not allocate resources fairly. Governments intervene to regulate or impose rules. One reason markets fail to work effectively is externality. Air pollution is an example of an externality. He charged air and the impact on people's lives. Therefore, the attacks of government to regulate markets.
Productivity -
A country's standard of living depends on its ability to produce goods and services. Differences in living standards are dramatic in some countries. Income differences reflect the quality of life. Productivity is what determines the standard of living. Training improves productivity. Economically free countries to promote the production. Research and development to improve the production rate.
Inflation -
Inflation is when the value of money decreases. Prices of goods and services increased to reflect only the increase in the money supply. Since money is no longer available, shrinks the value of it. To control inflation, made the call money rate and the rate of goods and services produced should be approximately level.
Inflation and unemployment -
The money supply to stimulate the economy and reduce unemployment, but in the long run, the inflation rate increases. However, if the money supply is reduced, unemployment falls and inflation rises. Phillips curve examines the relationship between inflation and unemployment. He explained that when inflation is high, unemployment is low and inflation is low, unemployment is high. However, the Phillips curve is a controversial topic. Over the last twenty years, the curve did not work due to low unemployment and inflation at the same time.
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