Read the basic Economics definition covering its micro, macro aspects and fields including financial, trading, international and more.
Basic Economics Meaning
Economics is the science that studies how people, firms, governments and nations make choices and decisions in allocating scarce resources. This ensures the satisfaction of their wants. It comes down to a social science that deals with the production and the use of goods and services. Additionally, it refers simply to how people use resources.
It is important to study Economics so that you can gain an understanding of how resources can best be distributed to meet the needs of all people. There is need for Economists in government as well as in various other agencies and businesses. Economics is divided into macroeconomics and microeconomics, described as follows:
Macroeconomics is the study of an entire system of economics. It concentrates on the aggregate economy activity of a whole country or the international market. It can, for example, study how a country uses resources, the time workers devote to leisure and work, effects of taxes on the population, or the productivity of various industries. Macroeconomics is a broad area of economics that focuses on growth and changes in national income and gross domestic product. Basically, it deals with the nation’s income, unemployment rates, foreign trades, GDP and the prices indices. It studies the relationship between different factors such as the nation’s income, national output, consumption, savings, unemployment, inflation and international trade.
Governments make different policy changes in order to avoid economic distresses such as unemployment and inflation. Macroeconomists use two major strategies that stabilize the economy:
Fiscal policy– is the important aspects of fiscal policy is government spending and taxation.
Monetary policy– controls the central bank, the monetary authority and the government. It focuses on a steady supply of money and interest rates to sustain country’s economy.
Macroeconomics is a broad field that focuses on change in the nation’s income and growth. It focuses on GDP, unemployment rate and prices indices of the entire economy.
Microeconomics concentrates on individual consumers or how a factor affects parts of the economic system or industries. It draws attention to the dynamics between lenders and borrowers, and buyers and sellers. Microeconomics is the study of business and individuals decisions regarding the price of goods and services. It majorly focuses on the demand and supply and other factors that determine the prices of goods and services in the economy. It is a very important economic concept that analyses consumer behavior and economy forces. Companies use it to determine the volume of goods they should manufacture.
In addition, Microeconomics is used to determine the price of the product depending on the amount of good in the market (supply). When the supply of a certain product is high, the demand is low, and the price is also low. When there is low supply of a certain product in the market, the demand is high, and the price shoots up. Microeconomics focuses on demand and supply and determines the price level. It facilitates decision making for individuals and businesses.
Fields of Economics
The following pages provide lots of other important information on various economics fields:
Other fields of economics include agricultural, and managerial. The pages present clear definitions of the particular topics and the benefits, etc., that they bring. You will be able to print the content of any of these pages if desired from economicsymh.com.
You may also be interested in economic development, and terms. Development speaks to the process employed by nations to improve the social well being of their citizens. Growth in Economic takes into account the indicators including gross domestic product, money supply, consumer price index that can help managers make the right business decisions.