Sunday, November 13, 2022

Ten Principles of Economics:

Ten Principles of Economics:

1.2.1 How People Make Decisions:

  • People face tradeoffs.
  • The cost of something is what you give up getting it.
  • Rational people think at the margin.
  • People respond to incentives.

 1.2.2 How People Interact:

  • Trade can make everyone better off.
  • Markets are usually a good way to organize economic activity.
  • Governments can sometimes improve economic outcomes.

1.2.3 How the Economy as a Whole Works:

  • The standard of living depends on a country’s production.
  • Prices rise when the government prints too much money.
  • Society faces a short-run tradeoff between inflation and unemployment.

(Source: Gregory N. Mankiw)


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