About This Chapter
Principles of Economics - Chapter Summary
The economics experts who teach these lessons help you understand the circular flow of economic activity and limitations of a free market economy. You'll study the concept of price elasticity and get definitions for such key terms as scarcity, productivity and the law of diminishing returns. This chapter will familiarize you with the components of gross domestic product and how unemployment rates are measured. Instructors will teach you about the fiscal policy tools used by the government and introduce you to different factors that play a role in economic growth. When you're finished watching the videos in this chapter, you'll have knowledge of:
- Mixed economies
- Supply and demand
- Opportunity costs
- Economic scarcity
- Consumer price index
- Free market competition
- U.S. government's role in the economy
The series of videos in this chapter offer a flexible and fun approach to learning about economics. The video lessons feature engaging narration and entertaining animations to help you easily retain key economics concepts and definitions. Start at the beginning and watch each of the videos in this chapter or select just the lessons you want to learn more about. Video tags let you review main topics without having to replay the entire video, offering you a handy tool for revisiting topics you might have missed. Use the self-assessment quizzes that come with each lesson to test your knowledge of the material and finish up your study of economics principles with the chapter exam.
1. Capitalism and the Free Market: Definition & Limitations
Capitalism is an economic system that has played a dominant part in building the world in which we currently live. In this lesson, you'll learn about some key concepts of capitalism, as well as its limitations.
2. Understanding Socialism, Communism, and Mixed Economies: Comparison & Analysis
Socialism and communism are alternative economic systems to capitalism. In this lesson, you'll learn some of the key concepts behind these economic systems. You'll also learn about mixed economic systems.
3. Price Elasticity: Understanding Supply and Demand
Marketing managers need to understand the basics of supply and demand in order to develop the precise price for their product. Inelastic and elastic demand explains how sensitive consumers are to price and how much flexibility it allows the marketing team.
4. Opportunity Cost: Definition & Real World Examples
Learn the most important concept of economics through the use of real-world scenarios that highlight both the benefits and the costs of decisions. Opportunity cost is a simple yet powerful principle that reveals how to make the best economic decisions possible, and it explains why people make the choices they do.
5. Economic Scarcity and the Function of Choice
Discover the foundation of the social science of economics as we explore the basic economic problem of scarce resources and unlimited wants using key definitions that create a framework for understanding everyday behavior in a nation.
6. Circular Flow of Economic Activity: The Flow of Goods, Services & Resources
Learn about the simple model used to describe where money goes and what it is exchanged for in a market economy. The circular flow model of economic activity shows you the basic relationships between households, firms and the government.
7. Gross Domestic Product: Definition and Components
Learn how economists measure the total production of an economy using gross domestic product (GDP). This lesson also outlines the components that make up a GDP. How do we calculate the economic value of a nation?
8. Consumer Price Index: Measuring the Cost of Living and Inflation
In this lesson, you'll learn what the Consumer Price Index is and how it measures changes in the level of prices in an economy. You'll also learn about the important economic concepts of inflation and deflation. Why do prices always seem to be going up?
9. Defining and Measuring the Unemployment Rate
You've probably heard about the unemployment rate, especially given how high it was in the 2008 recession. Find out how economists define unemployment, what the unemployment rate is, and how to calculate it in this lesson.
10. Competition Within Free Markets: Types & Summary
We live in a free market economy, but that doesn't mean there is always free competition. In this lesson, you'll learn about perfectly competitive markets, monopolies, monopolistic markets and oligopolies.
11. The Business Cycle: Economic Performance Over Time
Learn the economic terms that describe economic performance over time and how indicators such as unemployment and inflation behave throughout these economic fluctuations.
12. What Is Economic Growth and Development? - Definition, Theories & Indicators
A country's economic health can usually be measured by looking at that country's economic growth and development. This lesson defines and explains economic growth and economic development, including the role of U.S. foreign aid.
13. How the Government Promotes Economic Interests
The following lesson will cover how the government promotes its economic interests through businesses, labor, and agriculture. There will be a short quiz following the lesson to check your understanding.
14. Fiscal Policy Tools: Government Spending and Taxes
Discover the three main tools the government uses to address recessionary and inflationary economies - what economists call fiscal policy. Find out how these tools are used to help the economy in different situations.
15. What is the Federal Reserve System?
Have you ever wondered why interest rates go up and down, seemingly at random? Of course you have! Discover what the Federal Reserve is, what its goals are and how those goals are achieved in this introductory lesson explaining the central bank of the United States.
16. Expansionary Monetary Policy: Helping the Economy Grow
In this lesson, you'll learn how the central bank helps the economy grow during recessions by increasing the size of the money supply. An overview of the three tools of monetary policy are included as well as the reasons why monetary policy leads to higher economic output.
17. Contractionary Monetary Policy: Slowing the Economy Down
In this lesson, you'll find out more about the central bank's efforts to deal with an overheating economy, what economists call 'contractionary monetary policy.'
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