quinta-feira, 23 de janeiro de 2014

What is Trade-Off?

The expression "Trade-Off" is used in economic science to designate situations of choice between conflicting options. So when a government, a company or a housewife faces a scenario where need to decide for one of the options and forget the rest, they face a trade-off.

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In Economics, one of the trade-offs most cited is the case of the Phillips Curve where governments need to choose higher rates of inflation or higher unemployment rates. In summarizing, in the short term, the choice of government by the lower unemployment rate implies the higher the inflation rate.

Extending the concept of trade-off for the people's everyday lives, one can say that life is a sequence of trade-offs. Everyday people face the situations where are forced to make choices between conflicting options. Choose between work and leisure, buy house on the beach or in the backcountry, consume or save, see football or basketball, here are some everyday examples of trade-off.

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Tags: trade-off, economia, finanças, conceitos-economia, decisão

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