Chapter 2: Our Global Economy

Study Notes

In the early 1980s, Mexico faced economic difficulties due to its government's policies.
These policies created barriers to international trade, resulting in fewer foreign companies wanting to do business.
Consequently, job opportunities decreased, leading the government to provide state assistance programs.
Funding for these programs required the government to borrow heavily, increasing debt and diverting funds from public services.
Mexico implemented economic reforms to address the crisis.
The government encouraged foreign businesses to participate in its economy, reduced government spending, sold unprofitable state-owned companies, and created plans to manage its debt.
These reforms aimed to improve Mexico's competitiveness in the global marketplace and enhance its citizens' economic well-being.
Mexico witnessed improved economic conditions in recent years, including slower inflation rates, increased job opportunities, and higher incomes for its workforce.

Economics is the study of how individuals and societies make choices to allocate scarce resources to meet their needs and wants.
Individuals face scarcity, where their limited time and money restrict their ability to acquire everything they desire.
Countries also face scarcity, requiring them to prioritize resource allocation, such as deciding whether to grow their own food or to import agricultural products.
The decision-making process involves identifying needs and wants, gathering information, considering alternatives, evaluating alternatives based on costs and benefits, choosing the best option, and acting on the chosen decision.

Scarcity is the limited availability of resources to meet unlimited needs and wants.
Economic decisions are made daily by individuals, companies, and countries.
Choices are made due to constraints such as limited time and money.
Factors like scarcity, limited resources and unlimited wants drive economic choices.
Countries have to make decisions based on limited resources, such as deciding between growing food or importing agriculture products.
The study of how people choose to use their resources to satisfy their needs is the basis of economics.

### Economics and Decision Making

Economics is the study of how people choose to use limited resources to satisfy their unlimited wants and needs.
Scarcity is when the resources available are not enough to meet everyone's wants and needs.
Economic decisions involve trade-offs, as individuals, companies, and countries must choose how to use their limited resources.
Mexico's government implemented economic reforms in the 1980s to address economic difficulties.
The Mexican government allowed more foreign businesses to operate in the country, reduced government spending, sold unprofitable businesses, and worked to reduce government debt.
These reforms led to improved economic conditions in Mexico, with increased jobs and income for workers.
The economic challenges Mexico faced in the 1980s highlighted the importance of making effective economic decisions in a globalized world.