You like learning why as well as what. That is, you want to know why things happen and how they work instead of just memorizing factoids.

In the first decades after Keynes’s antirecessionary ideas were put into practice, they seemed to work really well. However, they didn’t fare so well during the 1970s, and it became apparent that although monetary and fiscal policy were powerful antirecessionary tools, they had their limitations. You want to know some economics, but you’re also busy leading a very full life. Consequently, although you want the crucial facts, you don’t want to have to read through a bunch of minutiae to find them.People aren’t always rational, and that matters because most of economics was developed by asking what a rational person would do in one situation or another. Behavioral economics fills in the gaps by looking at decision-making when people aren’t being rational. Four billion years of evolution has left us with brains that are prone to errors, including being overconfident and too focused on the present, being easily confused by irrelevant information, and being unable to see the bigger picture when making financial decisions. I spend Chapter 13 rationally explaining all this irrational behavior. It’s crazy fun. Zooming out: Macroeconomics and the big picture The unemployment rate, which measures what fraction of the labor force consists of those without jobs who are actively seeking jobs, normally rises during recessions and falls during expansions.

Economics gets to the heart of these issues, analyzing the behavior of individuals and firms, as well as social and political institutions, to see how well they convert humanity’s limited resources into the goods and services that best satisfy human wants and desires. Considering a Little Economic History By getting a thorough handle on fundamental economic principles, you can judge for yourself the economic policy proposals that politicians and others run around promoting. After reading this book, you’ll be much better able to sort the good from the bad. Framing Economics as the Science of Scarcity

If you think economics is a complicated discipline that's reserved for theorists and the intellectual elite and has nothing to do with you, think again. Economics impacts every aspect of our lives, from what we eat, to how we dress, to where we live. Economics might be complicated, but it has everything to do with you. Economics For Dummies helps you see how your personal financial picture is influenced by the larger economic picture. When you understand how what happens on Wall Street affects Main Street and how policies emanating from the White House impact the finances in your house, you'll be able to: E conomics is the science that studies how people and societies make decisions that allow them to get the most out of their limited resources. And because every country, every business, and every person has to deal with constraints, economics is literally everywhere. For instance, you could be doing something else right now besides reading this book. You could be exercising, watching a movie, or talking with a friend. You should only be reading this book if doing so is the best possible use of your very limited time. In the same way, you should hope that the paper and ink used to make this book have been put to their best use and that every last tax dollar that your government spends is being used in the best way. Note: Economics is full of two things you may not find very appealing: jargon and algebra. To minimize confusion, whenever I introduce a new term, I put it in italics and follow it closely with an easy-to-understand definition. Also, whenever I bring algebra into the discussion, I use those handy italics again to let you know that I’m referring to a mathematical variable. For instance, I is the abbreviation for investment, so you may see a sentence like this one: I think that I is too big. This is my first “for dummies” book I’ve read, mostly because I felt insulted the entire time I was reading it, but it does exactly what it says it’s going to. Spells out complicated concepts for the feeble-minded among us.

Extending that reasoning even further, you can see that demand curves with changing slopes (that is, demand curves that aren’t perfectly straight lines) tell you that the relationship between price and quantity demanded varies. On the steeper parts of such curves, a change in price causes a relatively small change in quantity demanded. On the flatter part of such curves, a change in price causes a relatively large change in quantity demanded. Using the demand curve to make predictions The Ancient Greeks invented a simple steam engine and the coin-operated vending machine. They even developed the basic idea behind the programmable computer. But they never quite got around to having an industrial revolution and entering on a path of sustained economic growth. You’re not totally intimidated by numbers, facts, and figures. Indeed, you welcome them because you like to have things proven to you instead of taking them on faith because some pinhead with a PhD says so.

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Perfect competition: Perfect competition happens when numerous small firms compete against each other. Firms in a competitive industry produce the socially optimal output level at the minimum possible cost per unit. Patent rights to protect inventors: Before patents, inventors usually saw their ideas stolen before they could make any money. By giving inventors the exclusive right to market and sell their inventions, patents gave a financial incentive to produce lots of inventions. Indeed, after patents came into existence, the world saw its first full-time inventors — people who made a living inventing things. remember So what factors combined in the late 18th century to so radically accelerate economic growth? The short answer is that the following institutions were in place: Many workers lose their jobs because firms need fewer workers to produce the reduced amount of output.