ABSTRACT
A lthough this book focuses on advanced financial principles, we will briefly review some fundamental economic principles that form the basis of finance. Economics has been defined by Walter Wessel as “the study of how people choose to allocate their scarce resources” (2000, p. 2). Key economic principles outlined in this section include: (1) demand, scarcity, surplus, and price; (2) microeconomics versus macroeconomics; and (3) wealth maximization/profits.
