Fields of Economics

• Economics is divided into Microeconomics and Macroeconomics.
• Microeconomics: studies individual economic decisions.
• Macroeconomics: examines the economy as a whole.

Basic Economic Concepts

• Economics deals with production, distribution, and consumption under scarcity.
• Resources include physical items and human resources like time and labor.
• Scarcity: wants exceed resources available.

Economic Behavior

• Individuals seek to use resources to improve their well-being.
• Specialization and division of labor are key in the economy.
• Entrepreneurship drives market competition and innovation.

Supply and Demand

• Price is determined by supply (production) and demand (consumer desire).
• Law of Demand: higher prices decrease quantity demanded.
• Law of Supply: higher prices increase quantity supplied.

Key Economic Institutions

• Institutions like the Executive Branch, Congress, IRS, and Federal Reserve govern economic activities.

Opportunity Cost

• Opportunity cost measures what is foregone to pursue an action.

Economic Systems

• Various systems include command, market, and mixed economies.
• The choice of economic system affects production and consumption.

Economic Patterns

• Economic activity correlates with production and consumption levels.

Measures of Economic Growth

• GDP, CPI, and employment rates track economic health.
    - GDP: total value of domestic production.
    - CPI: measures price changes over time.
    - Employment: measures job availability.

Stock Market

• Indicates economic strength based on company valuations and investor confidence.

GNP vs GDP

• GNP accounts for citizens' production abroad; GDP focuses on domestic production.

Government Market Regulation

• Price controls, subsidies, and taxes influence economic activity.

National Debt

• The national debt reflects government borrowing to fund operations.

The Federal Reserve System

• Central banking authority regulates money supply and interest rates.
• Monitors inflation and employment under its mandates.

Concepts of Price

• Inflation: overall price rise; Deflation: overall price decline.
• Recession: reduced economic activity, leads to recovery.

Federal Budget

• Composed of revenues (mainly from taxes) and expenditures (government spending).

Economic History

• Historical economic philosophies include mercantilism and capitalism, evolving through key events like the Great Depression and WWII.

Market Structures

• Types include pure competition, monopolistic competition, oligopoly, and monopoly.

Economic Systems Explained

• Capitalism: private ownership with minimal government intervention.
• Socialism: collective ownership aiming for equality.
• Communism: total equality through communal ownership.

Globalization

• Increasing interdependency of economies via trade and capital flow.

Trade Advantages

• Absolute and comparative advantages define production efficiencies.
• Specialization enhances productivity and trade benefits.

Types of Economic Resources

• Human, capital, and natural resources are essential for production.

Consumer Decision Factors

• Economic, functional, marketing, and social factors influence consumer behavior.

Tactics to Influence Consumer Decisions

• Businesses use strategies like incentives, social proof, and scarcity to drive purchases.

Currency Types

• Fixed currencies are tied to a stable asset; Floating currencies adjust based on market forces.

Monetary and Fiscal Policy

• Tools used by governments to stabilize and regulate the economy through interest rates and tax policies respectively.