ECN 204 Final: MACRO Final Exam Notes.docx
Document Summary
The individual: facing tradeoffs: scarcity in relation to wants means you face tradeoffs; there fore, opportunity costs: the cost of the choice you make is what you give up for or the you have to make choices opportunity cost, choosing a little more or less: choices are usually made at the margin: we choose a little more or a little less of something, the influence of incentives: the choices you make are influenced by incentives, specialization and trade: specialization and trade will improve the well being of. A rise in the standard of living requires a rise in the output of goods and services: money and inflation: if the monetary authorities of a country annually print money in excess of the growth of output of goods and services, this practice will eventually lead to inflation, inflation unemployment tradeoff: in short run, society faces a short run tradeoff between inflation and its level of unemployment.
