econ205jan17 - Principles: Economic agents, Households,...

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ECON 205 January 17, 2008 Have We Achieved These Objectives? No. US Economy has always faced either inflation, or Unemployment, or Both. Why? Because not all three objectives are complementary Conflicting Objectives: Full employment and Stable Price Complementary Objectives: Full employment and Growth Chapter 2: The Economic Problem Economics: Basic Assumptions - Basic Tools Basic Assumptions: Rational Economic Behavior, Self-Interest, and Maximizing
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Unformatted text preview: Principles: Economic agents, Households, firms, and Government are assumed to be rational and behave rationally. Objectives derived from these assumptions are: Households: Maximize Utility Firms: Maximize Profit Government: Maximize Votes Marginal Marginal Cost < or = Benefit = rational Cost > benefit = irrational Basic Tools: Market Analysis, Cost and Benefit Analysis Chapter 4: A First Look at Macroeconomics Business Cycles:...
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This note was uploaded on 02/19/2009 for the course ECON 20091_ECO taught by Professor Mohammadsafarzadeh during the Spring '09 term at USC.

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