Page 6 - Macroeconomics. book docx_Neat
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Inflation: A general and continuous increase in the overall price level.
Unemployment: A situation where people who are able and willing to work cannot find
jobs.
Economic Growth: An increase in total production and income over time.
Economic Stability: A condition where the economy avoids large fluctuations such as
inflation and recession.
Price Stability: A situation where the general price level remains relatively stable.
Scarcity: The condition of limited resources relative to unlimited wants.
1. Introduction
✓ Economics is a social science that studies how individuals and societies use limited
resources to satisfy unlimited wants.
✓ Human wants are many and continuously increasing, while resources such as land,
labor, capital, and natural resources are limited.
✓ Because of scarcity, societies must make choices about what to produce, how to
produce, and for whom to produce.
✓ Economics helps explain how individuals make decisions in their daily lives, such as
how to spend income and how much to save.
✓ It also explains how firms decide what to produce and how governments manage
economic resources to achieve economic goals.
✓ Economics is divided into two main branches: microeconomics and
macroeconomics.
2. Meaning of Macroeconomics
Macroeconomics is the branch of economics that studies the economy as a whole.
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