MacroI - Macroeconomics Dr Safarzadeh Chapters 1 5 Chapter...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Macroeconomics Dr. Safarzadeh Chapters 1 - 5 Chapter 1 Introduction What is Economics? Economics is Concerned with Optimum Allocation of Limited Resources Among Unlimited Wants . What Are Economics Resources? Economics Resources or Factors of Production are: • Labor • Land • Capital • Entrepreneur Chapter 1 Introduction • Labor includes Skilled and Unskilled Labor. • Land includes the Land and All the Resources on the Land and Under the Land. • Capital includes : Physical Tools of Production. Note that, in economics only physical tools of production are considered as capital. Money, bonds, and stocks are not capital. Why Do We Study Economics? Because economic resources are limited. Chapter 1 Introduction Limited or Scarce Resources are Resources that we pay a price for: Factor Prices Are: • Price of Labor: Wages • Price of Land: Rent • Price of Capital: Interest • Price of Entrepreneur: Profit How Do We Know a Resource is Limited? How Do We Allocate Economic Resources? The way Economic Resources are Allocated Depends on Economic Systems. Chapter 1 Introduction Economic Systems: • Free Market System • Command Economy • Mixed Economy In every economy, the economic system decides what to produce , how to produce , and for whom to produce . In a free market economy, the market or demand and supply decides the resource allocation. In a command economy the central planner or the government decides the resource allocation. Chapter 1 Introduction Statements Based on Value Judgment and Personal Norms. The way Things Should be (Based On our Own Value Judgment). Positive Economics: Statements Based on Fact, Data, The Way Things Are. Microeconomics: Study of Individual Economic Units. Topics such as consumer behavior or theory of firm. Macroeconomics: Study of the economy as a whole or at the aggregate level. The topics of interest in macro- economics are inflation, unemployment, GDP growth, the role of government, and the Fed. Chapter 1 Introduction Normative Economics: Three Main Objective of Every Economy: • Full Employment • Stable Prices • Economic Growth Conflicting objectives: Full Employment and Stable Price Complementary objectives: Full employment and Growth Have We Achieved These Objectives?...
View Full Document

{[ snackBarMessage ]}

Page1 / 56

MacroI - Macroeconomics Dr Safarzadeh Chapters 1 5 Chapter...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online