Bài giảng Macro - Chapter 1 The Nature and Method of Economics

The Nature and Methodof EconomicsChapter 1SLIDES PREPARED BY JUDITH SKUCE, GEORGIAN COLLEGEIn this chapter you will learnThe definition of economicsAbout the economic way of thinkingHow economists construct theoriesThe distinction between microeconomics and macroeconomicsThe pitfalls to objective thinkingChapter 1 TopicsTen Key Concepts to Retain for a LifetimeThe Economic PerspectiveEconomic MethodologyMacroeconomics & MicroeconomicsPitfalls to Objective ThinkingA Look AheadTen Key ConceptsThe IndividualFacing TradeoffsOpportunity CostsChoosing a Little More or LessThe Influence of IncentivesTen Key ConceptsInteraction Among IndividualsSpecialization & TradeThe Effectiveness of MarketsThe Role of GovernmentsTen Key ConceptsThe Economy as a Whole & the Standard of LivingProduction & the Standard of LivingMoney & InflationInflation-Unemployment TradeoffChapter 1 TopicsTen Key Concepts to Retain for a LifetimeThe Economic PerspectiveEconomic MethodologyMacroeconomics & MicroeconomicsPitfalls to Objective ThinkingA Look AheadThe Economic PerspectiveScarcity & ChoiceRational BehaviourMarginal Analysis: Benefits & CostsChapter 1 TopicsTen Key Concepts to Retain for a LifetimeThe Economic PerspectiveEconomic MethodologyMacroeconomics & MicroeconomicsPitfalls to Objective ThinkingA Look AheadEconomic MethodologyThe scientific method:observe the worldEconomic MethodologyThe scientific method:observe the worldformulate hypothesestest by comparing outcomes to predictionstheories, laws, principles, modelsEconomic Methodologygeneralizations: on averageother-things-equal assumption: change one thing at a timeabstractions: omit irrelevant facts & circumstancesgraphical expressionEconomic MethodologyPolicy economicsapply theories to set policies to resolve economic problems or further economic goalsFORMULATING ECONOMIC POLICYSTATE GOALSPOLICY OPTIONSIMPLEMENTATION& EVALUATIONEconomic Goalseconomic growthEconomic Goalseconomic growthfull employmentEconomic Goalseconomic growthfull employmenteconomic efficiencyEconomic Goalseconomic growthfull employmenteconomic efficiencyprice-level stabilityEconomic Goalseconomic growthfull employmenteconomic efficiencyprice-level stabilityeconomic freedomEconomic Goalseconomic growthfull employmenteconomic efficiencyprice-level stabilityeconomic freedomequitable distribution of incomecheesepleaseEconomic Goalseconomic growthfull employmenteconomic efficiencyprice-level stabilityeconomic freedomequitable distribution of incomeeconomic securityEconomic Goalseconomic growthfull employmenteconomic efficiencyprice-level stabilityeconomic freedomequitable distribution of incomeeconomic securitybalance of tradeEconomic Goalssubject to interpretationmay be complementarymay conflictpriorities must be setChapter 1 TopicsTen Key Concepts to Retain for a LifetimeThe Economic PerspectiveEconomic MethodologyMacroeconomics & MicroeconomicsPitfalls to Objective ThinkingA Look AheadMACROECONOMICS...MICROECONOMICS...Positive & Normative EconomicsPOSITIVE STATEMENTS.based upon facts — without value judgmentsNORMATIVE STATEMENTSbased upon subjective beliefs — “what ought to be”Chapter 1 TopicsTen Key Concepts to Retain for a LifetimeThe Economic PerspectiveEconomic MethodologyMacroeconomics & MicroeconomicsPitfalls to Objective ThinkingA Look AheadPitfalls to Objective ThinkingPitfalls to Objective ThinkingBiasesPitfalls to Objective ThinkingBiasesLoaded TerminologyPitfalls to Objective ThinkingBiasesLoaded TerminologyDefinitionsPitfalls to Objective ThinkingBiasesLoaded TerminologyDefinitionsFallacy of CompositionPitfalls to Objective ThinkingBiasesLoaded TerminologyDefinitionsFallacy of CompositionCausation FallaciesPost Hoc Fallacy??Pitfalls to Objective ThinkingBiasesLoaded TerminologyDefinitionsFallacy of CompositionCausation FallaciesPost Hoc FallacyCorrelation vs CausationChapter 1 TopicsTen Key Concepts to Retain for a LifetimeThe Economic PerspectiveEconomic MethodologyMacroeconomics & MicroeconomicsPitfalls to Objective ThinkingA Look AheadA Look AheadChapter 2: a model of the production choices facing an economyChapter 3: laws of demand & supplyChapter 4: how the market system worksChapter 5: the international sectorChapter 1 TopicsTen Key Concepts to Retain for a LifetimeThe Economic PerspectiveEconomic MethodologyMacroeconomics & MicroeconomicsPitfalls to Objective ThinkingA Look AheadTHEECONOMICPROBLEMCHAPTER 2COMING SOON