Ap Macro - ten principles

principle one

people face tradeoffs

principle two

the cost of something is what you give up to get it

principle three

rational people think at the margin

principle four

people respond to incentives

principle five

trade can make everyone better off

principle six

markets are usually a good way to organize economic activity

principle seven

the gov’t can sometimes improve market outcomes

principle eight

a country’s standard of living depends on their ability to produce goods and services

principle nine

prices rise when the gov’t prints too much money

principle ten

society face a short-run trade-off between inflation and unemployment