Economics Concepts and Principles

Economics: The study of how individuals, businesses, and governments allocate scarce resources to satisfy unlimited wants.
Microeconomics: Focuses on individual agents, such as households and firms, and their interactions in specific markets.
Macroeconomics: Examines the economy as a whole, including aggregate indicators like GDP, unemployment rates, and inflation.

Supply and Demand:
- Law of Demand: As price decreases, quantity demanded increases, and vice versa.
- Law of Supply: As price increases, quantity supplied increases, and vice versa.
- Equilibrium: The point where supply equals demand in a market.
Opportunity Cost: The cost of forgoing the next best alternative when making a decision.
Scarcity: Limited resources lead to the necessity of making choices.

Capitalism: Private ownership of resources and free markets determine production and prices.
Socialism: Public or collective ownership of resources, with central planning.
Mixed Economy: Combines elements of capitalism and socialism.

Gross Domestic Product (GDP): Total value of goods and services produced in a country.
Inflation: The rate at which prices for goods and services rise, eroding purchasing power.
Unemployment Rate: Percentage of the labor force that is unemployed and actively seeking employment.

Fiscal Policy:
- Government adjustments in spending and taxation to influence the economy.
- Tools include government budgets and public spending.
Monetary Policy:
- Central bank actions that manage the money supply and interest rates.
- Tools include open market operations, interest rate changes, and reserve requirements.

Perfect Competition: Many firms, identical products, free entry/exit.
Monopoly: Single firm dominates the market, unique product, high barriers to entry.
Oligopoly: Few firms dominate the market, products may be identical or differentiated.
Monopolistic Competition: Many firms, differentiated products, some pricing power.

Classical Economics: Emphasizes free markets, self-regulating nature of economies.
Keynesian Economics: Advocates for government intervention to stabilize economic cycles.
Supply-Side Economics: Focuses on boosting production through tax cuts and deregulation.

Trade Balance: Difference between a country's exports and imports.
Exchange Rates: The value of one currency for the purpose of conversion to another.
Globalization: Increasing interconnectedness of economies through trade and investment.

These notes provide a foundational overview of economic principles and concepts essential for understanding the field of economics.

Economics: Examines allocation of limited resources against boundless wants across individuals, businesses, and governments.
Microeconomics: Analyzes behaviors of individual agents such as households and firms in specific market interactions.
Macroeconomics: Studies the economy on a broad scale, evaluating aggregate metrics including GDP, unemployment, and inflation.

Supply and Demand:
- Law of Demand: As prices fall, demand rises; conversely, as prices rise, demand falls.
- Law of Supply: As prices increase, supply increases; as prices decrease, supply falls.
- Equilibrium: Represents the market state where quantity supplied matches quantity demanded.
Opportunity Cost: Highlights the value of the next best choice that is sacrificed in decision-making.
Scarcity: Underlines the necessity of choice-making due to limited resources available.

Capitalism: Characterized by private ownership and free market dynamics that dictate production and pricing.
Socialism: Involves public or collective resource ownership, often with centrally planned economies.
Mixed Economy: Integrates elements of both capitalism and socialism, allowing for both private and public sector influence.

Gross Domestic Product (GDP): Measures the overall economic activity represented by the total worth of goods and services produced.
Inflation: Refers to the rate at which overall price levels for goods and services increase, impacting purchasing power negatively.
Unemployment Rate: Indicates the percentage of the labor force actively seeking work but unable to find employment.

Fiscal Policy: Encompasses government strategies concerning taxation and spending to steer economic performance.
- Adjustments to budgets influence economic activity.
Monetary Policy: Involves actions by the central bank to regulate money supply and interest rates.
- Tools include open market operations and changes in reserve requirements.

Perfect Competition: Defined by many firms offering identical products with no barriers for market entry.
Monopoly: Exists when a single firm controls the market, producing a unique product with significant entry barriers.
Oligopoly: A market structure dominated by a small number of firms, which may produce about identical or different goods.
Monopolistic Competition: Features many firms offering differentiated products, granting some level of pricing control.

Classical Economics: Advocates for the efficacy of free markets and the inherent self-regulating nature of economies.
Keynesian Economics: Suggests active government intervention to mitigate economic fluctuations and foster stability.
Supply-Side Economics: Focuses on enhancing production capacities through tax reductions and reducing regulatory constraints.

Trade Balance: Measures the difference between the value of a country's exports and imports.
Exchange Rates: The measure of one currency's value relative to another during conversion processes.
Globalization: Describes the increasing interconnectedness of world economies driven by trade and investment flows.

Digital Economy: Highlights the rise of online marketplaces and the integration of digital currencies in commerce.
Sustainability: Reflects the growing focus on implementing environmentally-friendly economic practices.
Inequality: Engenders rising concerns regarding the distribution of wealth and income within societies.