Chapter 1 Reflection

What in this chapter made you think about an economic concept differently than your previous beliefs?
- Chapter 1 touched on Principle 6: Markets are usually a good way to organize economic activity. This section touches on the difference between central planned economies and market economies and the preference for most countries to move to a market economy. I am aware of Adam Smith’s observation about the invisible hand and how this leads communities to desirable market outcomes. Principle 7 says that governments can sometimes improve market outcomes. I found this concept interesting because I always believed that the government had a bigger sway in decisions even in market economies, however, according to the principles I may have misunderstood how much government stays involved.
What new questions do you have now about the US economy based on this chapter?
- After reading Chapter One, I would like to better understand how US Economists decide when to step in to affect the outcomes of the invisible hand, and who is responsible for making these decisions? Also, if Principle 5 states that trade can make everyone better off, why are we currently in so many trade wars?