1Preliminaries剖析.ppt

* A market economy is “decentralized,” meaning that there is no government committee that makes the decisions about what goods to produce and so forth. Instead, many households and firms make their own decisions: * Each of many households decides who to work for and what goods to buy. * Each of many firms decides whom to hire and what goods to produce. * In all versions of this textbook except Brief Principles of Macroeconomics, market efficiency and the invisible hand are covered more thoroughly in Chapter 7. * [“Govt” is an abbreviation for government. Throughout all of the Premi