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Intro to Economics Unit Visuals
Transcript of Intro to Economics Unit Visuals
strongly believed in free markets
wrote "The Road to Serfdom" about how socialism and communism would always fail
Won the Nobel Memorial Prize in 1974
Review these terms:
-limited role of government
Economic Systems videos
Intro to Economics
Intro to Econ
John Maynard Keynes
Wrote during the Great Depression about business cycles and recessions
believed in an increased role of government
beginning of the government running a budget deficit
Scottish economist known as the Father of Capitalism
Wrote "The Wealth of Nations" about division of labor and worker productivity
believed that markets thrive on self-interest
Gov't should play a very small role ('invisible hand')
believed in a free market system with little gov't intervention
the cause of instability was interference from gov't or Federal Reserve
Basic Economic Problem
Circular Flow Model
Free Market Economy
Also known as Socialist Economy:
Forms between free enterprise (capitalism) and command economies (communism)
*Has some private ownership and some government control of businesses.
Also called Capitalism or Free Enterprise:
*Based on private ownership of business
*Individuals make decisions on what to buy or sell.
Also known as Command Economy:
*Based government control of businesses and decisions regarding types and locations of economic activity and production.
Citizens can be assigned or strongly encouraged into various employment
Little or no private ownership of businesses.
The Basic Economic Problem
People have Unlimited Wants and Needs
Resources are Limited
What to Produce?
How to Produce?
For Whom to Produce?
Shortage - a temporary condition of a product being in short supply.
Scarcity - a permanent condition of limited resources and unlimited wants.
Define scarcity and shortage.
Intro to Econ
1. Scarcity forces tradeoffs
7. Future Consequences Count
6. Markets coordinate Trade between people and countries
5. Trade makes people better off
4. Incentives matter
3. Is it worth the time and money?
2. Cost vs. Benefits
An Economist's Tools:
Scientific Method to study how the world works
Graphs to analyze and display data
Models to focus on the effects of changes
Economics is about...
Making Policy Recommend-ations
Studying how people use limited resources to satisfy unlimited wants
Analyzing everyday enigmas
Analyzing how economies work
Teaching better decision making
Changes of the US Economic System
Benefits of the US Economic System
2. Freedom of producers - businesses choose what to sell based on demand
1. Freedom of consumers - Choose what you buy and sell
5. Investment opportunities - redirect resources for the future
6. Creation of Wealth
4. Responsive prices - producers respond to market changes
3. Variety of goods - to meet consumers' wants/needs
Changing role of gov't (more involved or less involved)
Influence of international trade/relations
Change in Political party power
What do you want to be when you grow up?
-Make a list of what you would need to make that happen.
-Circle or highlight the ones you don't have yet.
"As humans, we have unlimited wants and needs."
"The world offers limited amounts of resources to satisfy those unlimited desires."