Ten Principles of Economics
CONCLUSION You now have a taste of what economics is all about. In. the coming chapters, we will develop many specific insights about people, markets, and economies. Mastering these insights will take some effort, but it is not an overwhelming task. The field of...
Ten Principles of Economics
PRINCIPLE 10: SOCIETY FACES A SHORT RUN TRADE OFF BETWEEN INFLATION AND UNEMPLOYMENT Although a higher level of prices is, in the long run, the primary effect of increasing the quantity of money, the short-run story is more complex and more controversial, Most...
Ten Principles of Economics
PRINCIPLE 9: PRICES RISE WHEN THE GOVERNMENT PRINTS TOO MUCH MONEY In Germany in January 1921, a·daily newspaper cost 0.30 marks. Less than 2 years later, in November 1922, the same newspaper cost 70,000,000 marks. All other prices in the economy rose by...
Ten Principles of Economics
PRINCIPLE 8: A COUNTRY’S STANDARD OF LIVING DEPENDS ON ITS ABILITY TO PRODUCE GOODS AND SERVICES The differences in living standards around the world are staggering. In 2003, the average American had an income of about $37,500. In the same year, the average...
Ten Principles of Economics
HOW THE ECONOMY AS A WHOLE WORKS We started by discussing how individuals make decisions and then looked at how people interact with one another. All these decisions and interactions together make up “the economy.” The last three principles concern the...
Ten Principles of Economics
PRINCIPLE 7: GOVERNMENTS CAN SOMETIMES IMPROVE MARKET OUTCOMES If the invisible hand of the market is so great, why do we need government? One purpose of studying economics is to refine your view about the proper role and scope of government policy. One reason we need...
