10 Principles of Economics

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  1. People Face Tradeoffs
  2. The Cost of Something Is What You Give Up to Get It. (opportunity cost)
  3. Rational People Think at the Margin.
  4. People Respond to Incentives.
  5. Trade Can Make Everyone Better Off.
  6. Markets Are Usually a Good Way to Organize Economic Activity.
  7. Governments Can Sometimes Improve Market Outcomes.
  8. The Standard of Living Depends on a Country’s Production.
  9. Prices Rise When the Government Prints Too Much Money.
  10. Society Faces a Short-run Tradeoff Between Inflation and Unemployment.

The Phillips Curve(菲立浦斯曲线) illustrates the tradeoff between inflation and unemployment: inflation↓ unemployment↑

It’s a short-run tradeoff!

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