Question
Why is there a trade-off between the amount of consumption that people can enjoy today and the amount of consumption that they can enjoy in
- Why is there a trade-off between the amount of consumption that people can enjoy today and the amount of consumption that they can enjoy in the future? Why can't people enjoy more of both? How does saving relate to investment and thus to economic growth? What role do banks and other financial institutions play in aiding the economic growth process?
2. Why, in general, do shocks force people to make changes? Give at least two examples from your own experience.
3. Why do you think macroeconomists focus on just a few key statistics when trying to understand the health and trajectory of an economy? Would it be better to try to examine all possible data? Why or why not?
4. How does investment as defined by economists differ from investment as defined by the general public? What would happen to the amount of economic investment made today if firms expect the future returns to such investment to be very low? What would happen to the amount of economic investment today if firms expect future returns to be very high?
5. In what ways are national income statistics useful?
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