Despite its flaws, Peddling Prosperity has much to recommend it. There is no book written for a lay audience that explains the economics profession w… - Greg Mankiw

The circular-flow diagram offers a simple way of organizing the economic transactions that occur between households and firms in the economy. The two loops of the circular-flow diagram are distinct but related. The inner loop represents the flows of inputs and outputs. The households sell the use of their labor, land, and capital to the firms in the markets for the factors of production. The firms then use these factors to produce goods and services, which in turn are sold to households in the markets for goods...

Economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by an all-powerful dictator but through the combined actions of millions of households and firms.

To find a substitute for laboratory experiments, economists pay close attention to the natural experiments offered by history.