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4 Cards in this Set

  • Front
  • Back
Scarcity
forces us to make choices that, in turn,
result in the economic outcomes that structure how we live today and expand or limit our hopes for tomorrow
Aggregation
a simplifying device that transforms detailed information into streamlined representations of that information, usually some sort of average or index/ Aggregation is essential in macroeconomics
but if done carelessly it will warp our perceptions and lead to costly mistakes in private as well
as public decision-making
Macroeconomics
deals with broad, economy-wide events such as unemployment, inflation, and economic growth
economic model/“theory” or “story."
A “model” is just a formal name for our
attempt to identify connections, patterns, and inter-relationships in our lives and in the world
around us. It is a simplified representation of the “real world” that we employ in virtually any
goal-oriented undertaking, whether getting from apartment to class on time, laying the
groundwork for a rewarding career, or finding a set of economic policies that enhance a
nation’s productivity. A model (i.e., theory or story) is our working hypothesis of how certain
aspects of the world operate