2. Welcome to Principles of Macroeconomics

3. Economics is the study of how individuals and societies allocate scarce resources among competing alternative ends

4. Economists are concerned with a wide range of issues, including: n The nature and social contribution of entrepreneurship. n Legal forms of business organization and their drawbacks. n The connection between wages/compensation and worker productivity and loyalty. n The appropriability of “intellectual” property. n Patent laws--advantages and disadvantages. n Should government “bail out” failing business enterprises? n Should domestic companies be protected from foreign competition? n Causes of inflation and unemployment. n Should the market for local telephone service and electricity be deregulated? n Is the stock market “overvalued”?

5. à Land à Labor à Capital Economic resources are also called “factors of production,” since they furnish the physical and intellectual means to produce and distribute goods and services

9. The Three Fundamental Questions nWnWhat gets produced, and in what quantities? nHnHow are these goods produced? nFnFor whom are these goods produced ?

10. Payments for labor services, interest, transfer payments, services Taxes, borrowing Wages, rent, interest, profits Savings imports borrowing Payments for goods and services investment Government spending, subsidies taxes exports

11. Systems of Economic Organization n Tradition n Central Planning n The Market

13. Out of school for less than 10 years