MGMT 1 Lecture Notes - Lecture 2: Multinational Corporation, Fiscal Policy, Currency Intervention
Document Summary
Economics is about tradeoffs, what to give up and for what. Model building: simplified frameworks to understand complex reality (based on assumptions) Econometrics: use statistics to analyze and interpret empirical data. Thomas malthus: main concern is population growth, deplete resources and lead to poverty malthusian catastrophe (too many people on the planet) Adam smith: freedom, invisible hand, capitalism, free market, created huge amount of wealth but also inequalities (income and wealth), humans will be most motivated. Free market: buyers and sellers interact in free markets, prices are used to send signals, shortages are rare, increase chance of unethical if not illegal behavior. Most wealth is inherited, those who have money, invest it, they do not use it to hire more people or help others. No mobility for middle class to move up the income class. Cpi: track prices of bundles of things that people usually buy and pay for, measure change in prices (goods and services)
