intro 2 econ
voluntary trade
adam smith believed that __________________ __________ produced optimal benefits
policy
both positive & normative statements are required in order to create..?
facts; what ought to be
economics evaluates _____________ (positive) to model "__________________________________________" (normative)
resources
economics examines how society manages it's scarce ___________________
is not (but those things are included)
economics is / is not a study of money, prices, buying & selling?
the scientific method & testing of hypotheses
economics is a SCIENCE - it uses..?
ceteris paribus
economists evaluate one variable while holding all other's constant
colonies supply raw materials for England manufacturers
how would England practice mercantilism?
protectionism & government intervention
in "the invisible hand" idea, smith argued against ___________________ and __________________ _____________________ in business & trade
positive
positive or normative statement: high interest rates prohibit many young people from buying their first home ; the US spends more money on its military than any other country
normative
positive or normative statement: taxes in the US should be lowered ; unemployment is a more serious issue than inflation
mercantilism
rulers have always sought to allocate resources to enrich their kingdom - England practiced _______________________
greeks
the earliest know discussions of choice was with the..?
normative economic statements
what are statements that express opinions, goals, value-judgements?
positive economic statements
what are statements using data & facts that can be proved? these can also be a wrong statement because it can be proved wrong
centrally planned, free enterprise, mixed
what are the 3 modern economic systems?
cuba, venezuela, north korea, former soviet union
what countries have a centrally planned economy?
hong kong, singapore, new zealand, switzerland, austrailia, ireland
what countries have a free enterprise economy?
U.S. (and most other countries)
what countries have a mixed economy?
household management
what does "oikonomia" mean?
"with other conditions remaining the same"
what does ceteris paribus mean?
the invisible hand
what idea "killed" mercantilism?
the study of choice
what is economics?
the economy of the country (big picture)
what is macroeconomics the study of?
individual industries / consumers (specific companies, consumers, etc)
what is microeconomics the study of?
oikonomia
what is the philosophy of allocating resources among family members to decide things such as "what's for dinner?"
limitations (people could not just roam free)
while believing in voluntary trade, smith did recognize that there were some ______________ of free markets, but this is not the focus of his work
adam smith
who came up with the idea of "the invisible hand"?
adam smith (1776)
who is the "father" of economics & microeconomics?
john maynard keynes (1930s)
who is the "father" of macroeconomics?