First we lay down the meanings of the two terms used in the title. This is followed by their intermingling in the causal interrelations that they hold in explaining economic and social behavior and choice. The term arousal is associated with sudden excitement—that is, emotional induction. It is also used with the sensation of sexual excitement. The meaning of the term economic evaluation is associated with the realization and measurement of the net benefit achieved from an economic decision. This entry brings out these meanings in their microeconomic and macroeconomic contexts.