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Graphs & Trends. Vocabulary Exercise - Economic Recession. Economic Definitions. Political Economy is the study of how people get a living.
What, then, is Economics? Although the two terms are sometimes used interchangeably, there is a subtle distinction to be made between them. "Political Economy" is the older term, and it was used by the classical economists. Most standard textbooks today define "Economics" as "The science of how people make choices for the allocation of scarce resources to satisfy their unlimited desires. " That is a statement of the basic dilemma called "the problem of scarcity.
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