Practical guide in macroeconomics

The fundamental lesson in individual decision-making is that people are faced with trade-offs between alternative goals, that the cost of any action is measured in terms of the opportunities that flow from it, that rational people make decisions by comparing them. marginal costs and benefits, and that people change their behavior, responding to the incentives they encounter. The fundamental lessons about interactions between people mean that trade can be mutually beneficial, that markets are generally a good way to coordinate trade between people, and that government can potentially improve market outcomes if there is has a market failure or if the market performance is unfair. The fundamental lesson about the economy as a whole is that productivity is the ultimate source of living standards, that money growth is the ultimate source of inflation, and that society faces a short-term trade-off between l inflation and unemployment. Even the most sophisticated economic analysis is constructed using the 13 Cs introduced here.