Macroeconomics deals with large scale economic systems. One way to understand macroeconomics, is to understand the principles of economics. These include things such as the idea that trade can help everyone, and that people often face trade-offs. One trade off deals with opportunity cost. Opportunity cost is the idea that in order to reap the benefit of one choice, you need to give up the benefits of a different choice. In general, economics makes the assumption that people are rational.
Key Takeaways:
- Macroeconomics is another way to express the idea of a large-scale economic system.
- When people talk about supply and demand, it is really speaking of the relationship between buyers and sellers of goods.
- Opportunity cost is the idea that with any choice you make, you lose the benefits of other choices.
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