ECON 102 Lecture Notes - Invisible Hand
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ECON 102 Full Course Notes
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Document Summary
The study of the use of scarce resources to satisfy unlimited human wants. Preferred definition: a way of thinking about all human behavior. Application: how interest rates are determined by the bank of canada, the causes of unemployment, financial markets, etc. Positive statements statements of fact: when interests rates go up, people save more, can be evaluated by appeal to facts. Tax revenue should be used to develop programs and institutions to help those in need. Cannot be settled by appeal to facts arguments persist forever. An inconceivably complex system of interactions between individuals for the purpose of exchanging commodities. How is such a complex system organized and by whom: no one. Economic transactions are the result of mutually beneficial and voluntary exchanges between individual entities (persons, firms, the government) These uncoordinated interactions are remarkably effective at facilitating the exchange of goods and services (the invisible hand, adam smith)
