The importance of economic literacy

Principles of Economics aims to provide a basic level of economic literacy, allowing individuals to understand how the economy functions. By studying economics, individuals can gain insight into the impact of policies and make informed decisions. For example, understanding the consequences of raising the minimum wage can help individuals comprehend how it might lead to unemployment or labor market distortions. Economic literacy also highlights the significance of the division of labor and specialization, demonstrating that participating in the market allows individuals to produce goods and services for others, leading to increased productivity and a higher standard of living.