Economics, in 17 syllables.
By Crystal Yan
1. It’s thinking a 2% raise is more even when inflation is 3% and real rate is -1% (2%-3%= -1%):
Money illusion/You think you’re rich but you’re not/Your raise may mean less
2. The maximum of money to be made may never be known:
Laffer curve is hard/to understand It says zip/Max tax’s never known
3. Your money’s is up:
Dollar’s up, yen’s down/We’re stronger so export less/Import more Oh oops
This short e-book contains a very easy, fun, and interactive activity and lesson plan for K-12 educators and non-profit organizations that work with youth to implement. It is brought to you by Economics for All, an initiative to make learning economics fun and interactive for K-12 youth.
If you like what you see, I encourage you to visit our blog at http://econforall.tumblr.com or follow our tweets at http://twitter.com/econforall to read and learn macroeconomic principles in 140 characters or less.
About the author: http://crystalyan.weebly.com
Read it here! http://bit.ly/econofsoccer
20 Macroeconomic Principles in 140 characters or less
By Crystal Y.
Welcome to Economics 101, Twitter-style! Bite-sized bits of knowledge below:
1. Philips curve: unemployment up, inflation down. inflation up, unemployment down. If politicians say both down+lie, only true if we all die.
2. Factors of production: land, labor, capital, entrepreneurship. Memory tip: think entrepreneur brings together LLC (also ltd liability comp)!
3. Inflation: when prices go up, up, up. Could be due to (not full list): increase in money supply, unemployment down (short-term), etc.
4. Law of diminishing marginal utility: As you get more of a good thing, it becomes less good. Eating 1 burger is heaven, eating 20 is stupid.
5. Natural rate of unemployment: about constant 5%. People btwn jobs (frictional), mall Santas jobless in the summer (seasonal)…it’s natural.
6. Aggregate demand(AD)=GDP(gross domestic product)=C+I+G+E-M=consumption+investment+govt spending+exports-imports. Fiscal policy->G up, AD up
7. Say’s law says the supply creates its own demand. There will be no shortages and no surpluses. Supply will be equal to demand. Magic! :O
8. Monetary policy (control $ supply): Loose-Fed buys bonds&prices up, interest rates down Tight-Fed sells bonds&prices down, interest rates up
9. Opportunity cost-what you give up to get something else. For example, trade-off of watching TV is failing the econ test b/c of not studying
10. Fiscal policy (Keynesian): GOVT IS SUPER POWERFUL! Expansionary (deficit): spend $, cut taxes Contractionary (surplus): save $, raise taxes
11. Keynesian econ theory: Companies can sometimes be dumb. So let the way smarter govt fix things w/fiscal policy! @barackobama is Keynesian.
12. Production possibility curve: We can make 12 dice+0 cake, 10d+1c, 6d+2c, or 0d+3c. More=beyond current resources. Less=inefficient.
13. Demand (D): In 1996-Toy fad, more want Tickle Me Elmos->D up->scarcity (D>S)->price level up, adjust for S. $29 toy sold for $1500+
14. Supply (S): 1920-1933 in US-Prohibition, alcohol made illegal->S down->scarcity (D>S)->black market for alcohol and price level up.
15. Bimetallism: ratios of money against two commodities (ex. gold+silver). Money is expressed as gold+silver, like fractions with pizza+donuts
16. Politician: Reelect me! GDP is up! Economist: GDP is always up, dummy. GDP deflator=nominal GDP/real GDP->shows real price level+inflation
17. Recession: When there is less economic activity, GDP goes down, part of business cycle. Depression: When recession is v. long, banks fail.
18. Supply-side econ: Let’s change supply! If we cut income taxes and business taxes, consumers will get cheaper stuff. APUSHers:NOT Reagonomics
19. Tax: progressive (amt $ up,tax rate up->income tax), regressive (amt $ up,tax rate down->poll tax), proportional (tax rate fixed->sales tax)
20. Classical/laissez-faire econ: govt can be lazy+do nothing if econ bad/good, market will take care of itself magically (via invisible hand).
Economics for All is an initiative to make learning economics fun and interactive for K-12 youth.
Our pilot programs include a free e-book with interactive lesson plans to implement for K-12 educators and non-profits, as well as a Twitter account summarizing 20 basic macroeconomic principles in 140 characters or less.
Check it out! :)