Economics Economics - The study of choices.
- Choosing one thing in exchange for giving up on something else.
- The study of scarcity, how to allocate limited resources.
- Question of money, how to manage it, etc.
Adam Smith Adam Smiths’ Ideas/Beliefs - To make money, produce things that people are willing to buy
- Businesses create jobs, which leads to a large national income
- Free trade and an economy, if controlled, would allow everyone to progress.
Question - What would Adam Smith recommend that we produce today?
Adam Smiths’ Ideas/Beliefs Question - What might Adam Smith think about the influence that the government currently has on businesses and the market?
Adam Smith - Smith’s ideas go by the name capitalism
- Capitalism
- - most businesses are privately owned
- - competition and free market most often determine what will be produced and what price it will sell
Capitalism - Capitalism also includes…
- 1. People can decide how to spend their income (money)
- 2. Companies can choose which goods and services to produce and how much to charge
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Capitalism - 3. Companies can compete with others
- Capitalism allows personal freedom and provides a high standard of living.
Question - Is the policy of capitalism used everywhere in the world?
- If not, then where is it not used?
People and Economy Market - Market- place where people buy and sell goods
- Prices are determined by supply (how much) and demand (how many) and competition
Question - What happens if people are not buying products and not investing money in the stock market?
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