Economics

  

Categories: Econ, Careers, Education

The masses believe that economics is all about money. It's not. It's just as much about behavior. It's the study of how people spend their time and how they divvy up resources and how they make the decisions that they make. It's about studying how people make stuff, use stuff, and move stuff around...but it's also about money, at least to the extent that money equates to wealth and material prosperity.

There are two main branches of economics: macroeconomics, which looks at how the principles of econ work on a large scale, nations, and societies and the like...and microeconomics, which looks at smaller-scale applications. Like how you decide whether to pay up for Red Lobster, or just heat up the fish sticks that got stuck to the bottom of the freezer.

So yeah...macroeconomics is the big stuff. The national economy. Global trade. Interstellar currency exchange. Total aggregate demand and supply as it relates to inflation, gross domestic product, national income, interest rates, unemployment, and all kinds of changes to price levels and liquidity.

Micro is all about the individual corporation, either small or big businesses...or families and individuals.

And by the way, those recording devices the government has implanted in your brain? Yeah…you hope those are microchips, and not, um…macrochips. Much harder to remove.

Related or Semi-related Video

Finance: What is economic cyclicality ("...13778 Views

00:00

Finance allah shmoop What is economic cyclicality All right Well

00:07

if you looked at the history of growth and decline

00:10

in the u s economy you think it was run

00:13

by a bunch of knuckleheads Meat would poop and poop

00:16

all in congress Now surprisingly o r maybe not In

00:20

fact economic cyclicality is a reflection of resource glut and

00:25

then scarcity and the willingness of buyers Teo you know

00:29

buy stuff that is when times were good consumers and

00:31

businesses by things hire workers consume commodities at office space

00:36

and factories until there is a shift in tastes and

00:40

sentiment You know like the horse industry before henry ford

00:43

came along anyway Sometimes the shift that triggers an economic

00:47

cycle comes from the government like when times air too

00:50

good there's usually rampant inflation People in companies will simply

00:54

choose to just pay up the extra two bucks a

00:56

foot to a rent office space The company can pass

00:59

on that extra cost by raising its prices to customers

01:02

from eighty dollars a year to ninety dollars and nobody

01:05

will notice until they do Yeah the government wanted desperately

01:08

to cool inflation in the nineteen seventies so the fed

01:12

raised short term borrowing rate costs dramatically from somewhere in

01:16

the three to four percent range to closer to like

01:18

ten percent And the cost of renting money became so

01:21

expensive And because companies were highly leveraged borrowing money to

01:26

build factories and hire workers and expand that well then

01:30

everything contracted with leverage right So they had all this

01:33

debt and revenues went down They still to pay the

01:35

dead and well that was a bad scene So inflation

01:38

was contained at the cost of a vastly cooler economy

01:42

So things contract then like a scared turtle or a

01:46

you know like when it do jumps in a cold

01:49

ocean and all right But then eventually one brave alligator

01:52

emerges to see if it concrete's back up under the

01:56

top of the food chain and eat some chickens or

01:59

dear Whatever alligators eat what do they eat anyway And

02:03

the consumer starts buying things adding risk rever been reducing

02:07

it and the cycle takes off again gets picture You

02:10

know it's the circle the circle of life round and

02:13

round It goes where it stops Well actually we do 00:02:15.523 --> [endTime] know Circle of economy

Find other enlightening terms in Shmoop Finance Genius Bar(f)