YFF - Economics and Your Financial Future (Lesson)

Economics and Your Financial Future

Introduction 

Economics is a social science that analyzes the production, distribution, and consumption of goods and services. Economics looks at the basic fundamental problem of scarcity. Scarcity examines the relationship between human wants and needs as it relates to limited resources.

There are two main components in the study of Economics, Microeconomics and Macroeconomics. Microeconomics examines the behavior of basic elements in the economy including things such as consumers and firms, and buyers and sellers. Macroeconomics addresses issues affecting an entire economy including unemployment, inflation, economic growth, and monetary and fiscal policy.

When examining economics one examines the relationship between consumers and the market. A circular flow model is a simple economic model that illustrates the relationship between the firms, households, and the government. More complete models would illustrate the relationship between imports and exports.

There are three different business types including corporations, partnerships, and sole proprietorships. Ultimately, by studying the economic and social goals of a country, as well as the personal finance decisions of the individual, one will have a clearer picture of how each economic system faces the basic economic problem of scarcity.

 

 

Scarcity and Choice

Watch this video discussing scarcity and choice.

 

 

Review

Review the terms you've learned so far by completing the activity below.

 

 

 

 

 

Now that you have learned about economics, it’s time to move on in our study of economics. In the next section we will learn about different types of economies and the nations where these types of economies exist. So get ready to learn about market, command, mixed and traditional economies.

 

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