ECON 1P92 Lecture Notes - Lecture 1: Opportunity Cost, North American Free Trade Agreement

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Macro deals with the entire economy all firms, all individuals. Macro - gdp, unemployment, cpi, inflation, recession (negative economic growth) Macro - deficits and debts, fiscal policies (government spending and taxation), interest rates, exchange rates. Economics is a social science not natural science. Example: economist observes increasing prices, develops theory of inflation. Prices rise when governments print too much money. Collects data on many prices from many countries more observation. Economists have to make assumptions to simplify the complex world easier to understand concepts. Labour, and capital (buildings and machines and equipment) Combination of output that the economy can possibly produce given the available fop and the available tech. Opportunity cost: the cost of something is what you give up to get it. Ppf shows us oc of one good as measured in terms of the other good. Slope of ppf: as you go down the ppf oc is increasing.

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