PRINCIPLES OF MACROECONOMICS

The word economy comes from the Greek word for “one who manages a household.” At first, this origin might seem peculiar. But, in fact, households and

economies have much in common. A household faces many decisions. It must decide which members of the household do which tasks and what each member gets in return: Who cooks dinner? Who does the laundry? Who gets the extra dessert at dinner? Who gets to choose what TV show to watch? In short, the household must allocate its scarce resources among its various members, taking into account each member’s abilities, efforts, and desires.

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Autor: N. Gregory Mankiw

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