This paper provides a concise survey of foundational economic concepts for introductory students. It covers the laws of supply and demand, equilibrium pricing, and the distinction between the public and private sectors. The paper then moves to macroeconomic indicators such as GDP and GNP, the role of fiscal and monetary policy, and theories of economic growth — including mercantilism and the influence of the Industrial Revolution. It concludes with a brief examination of the United States' position in international trade and the domestic debate over the balance between economic benefit and broader social priorities.
The demand for a commodity or service is the amount customers are ready and able to acquire in a defined period of time at a specific price. The law of demand states that the higher the price of a good, the smaller the quantity demanded, other things remaining equal. The supply of a commodity or service is the amount producers are ready to produce and release onto the market in a defined period of time at a specific price. The law of supply states that the higher the price of a good, the higher the quantity supplied, other things remaining equal.
Markets tend toward an equilibrium price and an equilibrium quantity. An increase in demand causes an increase in both the equilibrium price and the equilibrium quantity. A decrease in demand causes a fall in both the equilibrium price and the equilibrium quantity. A rise in supply causes a fall in equilibrium price and an increase in equilibrium quantity. Conversely, a fall in supply causes a rise in equilibrium price and a decrease in equilibrium quantity.
The public sector is the division of economic and administrative life that deals with the delivery of goods and services by and for the government, whether national, regional, or local. The private sector, by contrast, seeks to protect the ordinary citizen and investor and to establish uniform rules and regulations for every actor within the economic system.
Macroeconomics is a branch of economics that deals with the performance, structure, and behavior of a national economy as a whole. Together with microeconomics, it is one of the two most wide-ranging fields in economics. Macroeconomists study collective indicators such as Gross Domestic Product (GDP), unemployment rates, and price indexes in order to better understand the way in which the economy functions. The GDP is defined as the total final value of all goods and services produced in a given country in a given year.
To measure the economic performance of a country, analysts often use output per capita. A country's productivity can also be assessed by calculating the Gross National Product (GNP), which represents the market value of the sum of all goods and services produced in the economy. A country's productivity should show a consistently growing figure in order to confirm that the country is developing at its fullest potential.
"Government tools for managing the economy"
"Historical theories of global economic growth"
"U.S. trade policy and competing national priorities"
You’re 60% through this paper. Sign up to read the remaining 3 sections.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.