ECON 2002.01 Lecture 1: Macroeconomics Chapter 1-2

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ECON 2002.01 Full Course Notes
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ECON 2002.01 Full Course Notes
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Economics studies how individuals, firms, and societies make decisions to maximize their well-being given limitations. Economics assumes that people: are rational, are self-interested and respond to incentives. Our unlimited wants clash with limited resources, leading to scarcity. Everyone faces scarcity, our time on earth is limited. Microeconomics is the study of the decision making by individuals, businesses, and industries. Extends topics to labor laws, environmental policy and health insurance policy. Macroeconomics is the study of the broader issues in the economy such as inflation, unemployment and national output of goods and services. Looks at policies that increase economic growth, the impact of government spending and taxation, the effect of monetary policy on the economy, and inflation. Graphs, charts, and equations are often the simplest and most efficient ways to express data and ideas. Stylized , we mean that economists stylized approaches to a number of issues. Begin with simple models, then gradually build to more difficult ones.

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