Definition of Economics:
The Economist's Dictionary of Economics defines economics as "The study of the production, distribution and consumption of wealth in human society."
The 1828 edition of Webster's dictionary contains that could still apply today:
"Political economy, the administration of the revenues of a nation; or the management and regulation of its resources and productive property and labor. Political economy comprehends all the measures by which the property and labor of citizens are directed in the best manner to the success of individual industry and enterprise, and to the public prosperity."
Economics is the science that deals with the production, allocation, and use of goods and services, it is important to study how resources can best be distributed to meet the needs of the greatest number of people. As we are more connected globally to one another, the study of economics becomes an extremely important one. While there are many subdivisions in the study of economics, two major ones are macroeconomics and microeconomics. Macroeconomics is the study of the entire systems of economics. Microeconomics is the study of how the systems affects one business or parts of the economic system.
Classification of Economics :
From this definition, we can break down the study of economics into two broad categories - microeconomics and macroeconomics.
Microeconomics: Roughly speaking, microeconomics deals with economics decisions made at a low, or micro, level. More precisely, I would define microeconomics as "the analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions effect others".
Macroeconomics is the branch of economics concerned with aggregates, such as national income, consumption, and investment ".
The Economist's Dictionary of Economics defines Macroeconomics as "The study of whole economic systems aggregating over the functioning of individual economic units. It is primarily concerned with variables which follow systematic and predictable paths of behaviors and can be analysed independently of the decisions of the many agents who determine their level. More specifically, it is a study of national economies and the determination of national income."
Importance of economics :
Economics Knowledge Is Useful At a Personal Level
We can learn a lot of skills and knowledge that can apply to other jobs or to our personal life. Learning about interest rates, exchange rates, economic indicators and equity markets can help us make better decisions about investing and obtaining mortgages. The statistical skills gained that could use again and again, mostly in business settings. It also learn us a fair bit about Microsoft Excel in our first two years in economics, which has aided greatly.
Economists Understand Unintended Consequences
Economics teaches students how to understand and spot secondary effects and possible unintended consequences. This may seem relatively unimportant, but it's the most useful thing received from economics training. Most economics problems have secondary effects - the deadweight loss from taxation is one such secondary effect. A government creates a tax to pay for some needed social program, but the secondary effect of that tax is that it changes people's behavior, causing economic growth to slow. By learning more about economics and working on hundreds of economics problems, we can learn the skill of being able to spot secondary effects and unintended consequences in other areas. This can help us make better decisions about our personal life and make more valuable to business;
Economics Provides an Understanding of How The World Works
Learn more about how the world works, will learn more about the impact decisions have on...
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