fallacy of composition in economics
The fallacy of composition in economics refers to the mistaken belief that what is true for an individual or a part is also true for the whole or the entire economy. It occurs when someone assumes that the outcomes or benefits experienced at the micro level will necessarily translate to the macro level, without considering the broader implications and interactions within the economy.
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Related Concepts (21)
- aggregate demand and supply
- business cycles
- consumer behavior
- economic development
- economic growth
- economic indicators
- externalities
- fallacy of composition
- financial markets
- fiscal policy
- government interventions
- income distribution
- inflation and deflation
- international trade
- labor market dynamics
- macroeconomic policies
- market equilibrium
- market failures
- monetary policy
- price determination
- production and efficiency
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