Ten principles of Mankiw

Question 1

1. People Face Trade offs

Answer 1

2. The Cost of Something is What You Give Up to Get It

Question 2

3. Rational People Think at the Margin

Answer 2

4. People Respond to Incentives

Question 3

5. Trade Can Make Everyone Better Off

Answer 3

6. Markets Are Usually a Good Way to Organize Economic Activity

Question 4

7. The government can sometimes improves economic outcomes

Answer 4

8. The standard of living depends upon country’s production

Question 5

9. Prices Rise When the Government Prints Too Much Money

Answer 5

10. Society Faces a Short-Run Tradeoff Between Inflation and Unemployment