Macroeconomics Essay

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What is macroeconomics? Our textbook defines this as “the branch of economics that deals with human behavior and choices as they relate to highly aggregate markets or the entire economy” (Arnold, 2010). In the past seven weeks we have learned lot about macroeconomics. We first learned about the true meaning of economics which is the study of choice and decision making in a world with limits. We learned about the 10 principles of economics which include people face tradeoffs, the cost of something is what you give up to get it, rational people think at the margin, people respond to incentives, trade can make everyone better off, markets are usually a good way to organize economic activity, governments can sometimes improve market outcomes, a country’s standard of living depends on its ability to produce goods and services, prices rise when the government prints too much money, and society faces a short run tradeoff between inflation and unemployment. People respond to incentives are behavior changes when costs or benefits change. When you give employees incentives it can help them to be motivated in what they do. One incentive we have for people that work with us is that if they are still working for us when they turn 71 they can collect their pension and salary at the same time. This intrigues people who may think about retiring at 70 to stay one or more years and collect their pension and salary at the same time. People face tradeoffs means to get one thing, you have to give up something else. Making decisions requires trading off one goal against another. People are always put in the position that ultimately leads them to make one choice or another. This year we had to give up our Christmas bonuses in order to save our budget. Although this was a tough thing to swallow we all looked at it from the point of we are giving up our yearly bonuses in order to keep

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