Study Notes on Principles of Macroeconomics

Introduction to Economics

• Economics defined as the study of resource allocation due to scarcity.

• Importance emphasized in social media age through dissemination of information.

Key Concepts in Economics

• Scarcity: Real-world implications highlighted by homelessness.

• Division of Labor: Introduced by Adam Smith in "The Wealth of Nations"; involves segmenting tasks to improve production efficiency.

• Microeconomics vs Macroeconomics: Distinction in focus areas within the economic field.

Economic Theories and Models

• Economists utilize theories and models to analyze market interactions.

• Circular Flow Diagram: Displays interactions between households and firms in both goods/services and labor markets.

Economic Systems Overview

• Command Economy: Examples include Ancient Egypt, Medieval societies, and modern-day Cuba and North Korea.

• Market Economy: Decentralized decision-making, private ownership of resources, based on supply and demand principles.

Globalization and the Economy

• Increasing global interconnectedness illustrated through cargo shipping as a trade method.

• Discussion of impact on product/service availability and economic structure.