Introduction. Economists have developed the terminology to describe economic is-

Economists have developed the terminology to describe economic is-

sues. This terminology is important because if you are going to talk about

the state of the economy, you need the terminology to do it. Shareholder,

GDP, GNP, capital, supply and demand, costs, benefits, exchange rate are

just a few of the terms the meaning of which any educated person in

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modern society needs to know. Two terms to be introduced to you im-

mediately are the economy and economics. The economy is the institu-

tional structure through which individuals in a society coordinate their

diverse wants or desires. Economics is the study of the economy. That

is, economics is the study of how human beings in a society coordinate

their wants and desires.

An economic institution is a physical or mental structure that signifi-

cantly influences economic decisions. Corporations, governments, and

cultural norms are all economic institutions. Many economic institu-

tions have social, political, and religious dimensions. For example, your

job often influences your social standing. In addition, many social in-

stitutions, such as family, have economic functions. If any institution

significantly affects economic decisions, it can be considered as an eco-

nomic institution. Even cultural norms can affect economies. A cultural

norm is a standard people use when they determine whether a particular

activity or behaviour is acceptable.

Learning economic reasoning means learning how to think as an

economist. People trained in economics think in a certain way. They

analyze everything critically. Having put their emotions aside, they com-

pare the costs and the benefits of every issue and make decisions based

on those costs and benefits.

Text 2

Read the text. Be ready to answer the questions below it and explain the key terms of

the text given both in bold and italics.

Date: 2015-12-13; view: 806; Нарушение авторских прав