PART1

Understanding the Economic World We Live In

Imagine that you are a visitor to this planet, and you came here to understand how people live and organize their economic society. How would you describe your observations? You would find that businesses produce goods, and consumers buy them. To make these goods, producers might get a loan of some amount of money, or capital, at a certain interest rate from a bank. This capital is used to buy raw materials and equipment, to pay people who make the products, and to pay rent on the land and building where products are manufactured.

You would venture out to stores to see where these products are sold. Here you encounter the consumers who are busy comparing the products that meet their needs at ...

Get Economics now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.