ABSTRACT
This chapter starts with the term well-being to describe the overall quality of life, recognizing that this broad goal has numerous normative components. Economics is the study of how people manage their resources to meet their needs and enhance their well-being. Individuals and societies engage in four essential economic activities: resource maintenance, production, distribution, and consumption. Resource maintenance means tending to, preserving, or improving the natural, produced, human, and social resources that form the basis for the economy and life itself. Economic conditions at the aggregate level create the environment in which individual economic actors make their decisions. This chapter follows the common convention of using gross domestic product (GDP) as an indicator of prosperity. During some periods, GDP fell as countries experienced economic contractions, and during other periods, GDP rose very steeply due to rapid economic expansion.
