individuals, all while the incomes of those in the “middle classes” have
grown very slowly. The causes of this rising inequality are hotly debated
among economists, but most agree that the nature and pace of
technological change and the growing ability of firms to locate their
production facilities in lower-wage developing countries are contributing
factors. There is also considerable debate regarding what government
actions could be taken to slow or reverse the increase in income
inequality, and whether the benefits of those actions in terms of reduced
inequality would be justified by the associated costs.
These six issues are only a small sample of the many economic issues that
confront Canada and other countries. To understand any of them it is
necessary to have a basic understanding of economics—how markets
work, how prices are determined, in what sense markets sometimes fail to
work well, and how government policy can be used to improve
outcomes. These are the main topics of this book. There is a lot to learn,
and not many weeks in your college or university course. So, let’s get
started at the very beginning.