Question

What is the most important economic principle you learned from the course? How did this information improve your understanding of macroeconomics, and what is its application in the macroeconomic environment?

Answer 1

Most important:

Opportunity cost principle:

This is the best benefit foregone because of not choosing an alternative and choosing some other alternative. It is expressed in monetary value.

Example: suppose watching movie is sacrificed, satisfaction level is $20, in exchange of study.

How did:

It helps to understand macroeconomics.

Macro means big, indicating the economy of a country. This gives idea how and why a country sacrifices the production of a certain good because of producing some other goods. Selection of activities is very important for economic growth (such as an increase in GDP) and employment (it depends on availability of resources).