Key Concepts in Economics

Study of how individuals, businesses, and governments allocate scarce resources.
Examines production, distribution, and consumption of goods and services.

Microeconomics: Focuses on individual agents (consumers, firms) and their interactions.
Macroeconomics: Studies aggregated indicators (GDP, unemployment rates) and national economies.

Scarcity: Limited resources lead to limited choices.
Opportunity Cost: The next best alternative foregone when making a choice.
Supply and Demand: Determines prices in a market economy.
- Supply: Quantity of a good that producers are willing to sell.
- Demand: Quantity of a good that consumers are willing to purchase.

Gross Domestic Product (GDP): Total value of goods and services produced in a country.
Unemployment Rate: Percentage of the labor force that is unemployed.
Inflation Rate: Rate at which the general level of prices for goods and services rises.

Fiscal Policy: Government spending and tax policies to influence the economy.
Monetary Policy: Central bank's management of money supply and interest rates.

Comparative Advantage: Ability of a country to produce goods at a lower opportunity cost.
Trade Barriers: Tariffs, quotas, and regulations that restrict international trade.

Classical Economics: Belief in self-regulating markets and free competition.
Keynesian Economics: Advocates for government intervention to stabilize the economy.
Supply-Side Economics: Focuses on boosting supply to stimulate economic growth.

Globalization: Increasing interdependence of world economies.
Digital Economy: Rise of online transactions and e-commerce.
Sustainability: Economic activities that meet current needs without compromising future generations.

Economics investigates resource allocation among individuals, businesses, and governments in the context of scarcity.
Analyzes the processes of producing, distributing, and consuming goods and services.

Microeconomics explores the decisions and interactions of individual economic agents such as consumers and firms.
Macroeconomics examines broader economic indicators, including Gross Domestic Product (GDP) and unemployment rates, focusing on national economies.

Scarcity highlights that limited resources result in limited choices and necessitate trade-offs.
Opportunity Cost refers to the value of the next best alternative that is forgone when a decision is made.
Supply and Demand dictate market prices, where supply is the amount producers are willing to sell and demand is the quantity consumers are ready to purchase.

Perfect Competition features numerous firms selling identical products with low barriers to entry and exit.
Monopolistic Competition involves many firms offering differentiated products that are not perfect substitutes.
Oligopoly is characterized by a few firms holding substantial market power and influence over prices.
Monopoly exists when a single firm dominates the entire market with no close substitutes.

Gross Domestic Product (GDP) represents the total monetary value of all final goods and services produced within a country during a specific period.
Unemployment Rate measures the percentage of the labor force that is without jobs but actively seeking employment.
Inflation Rate tracks the percentage increase in the general price level of goods and services over time.

Traditional Economy relies on customs and historical practices to make economic decisions.
Command Economy is governed by centralized authority, with significant government control over resources and production.
Market Economy is driven by individual decisions made through voluntary trade and market interactions.
Mixed Economy incorporates elements of both market and command economies, balancing government intervention with free market principles.

Fiscal Policy involves government actions on spending and taxation aimed at influencing economic activity.
Monetary Policy refers to how a central bank regulates money supply and interest rates to achieve economic objectives.

Comparative Advantage occurs when a country can produce goods at a lower opportunity cost compared to others, promoting specialization and trade.
Trade Barriers include instruments like tariffs, quotas, and regulations that inhibit or limit international trade flows.

Classical Economics posits that markets are self-regulating and that free competition leads to efficient outcomes.
Keynesian Economics suggests that active government intervention is necessary to adjust economic fluctuations and stabilize the economy.
Supply-Side Economics focuses on enhancing supply capacity as a means to stimulate economic growth, often through tax cuts and deregulation.

Globalization refers to the growing interconnectedness and interdependence of national economies across the globe.
Digital Economy highlights the increasing significance of online transactions and e-commerce in economic activities.
Sustainability emphasizes economic practices that fulfill current needs while ensuring future generations can meet their own needs.