Economics is a part of social science that is associated with the production, distribution and consumption of services and good. This subject studies how nations, governments, businesses, and individuals make choices on allotted resources to satisfy their needs and wants.
Furthermore, it also helps to determine how groups should coordinate their efforts to acquire maximum output. Generally, economics is broken into Macroeconomics and microeconomics. While the former one focuses on the aggregate Economy’s behaviour; the latter one concentrates on individual businesses and consumers.
The world has seen a gamut of economists who have provided a variety of useful theories and strategies. When talking about the first-ever economic thinker, it goes back to the 8th century B.C., when there was Hesiod – a Greek poet and a farmer.
He managed to write that time, materials, and labour required an efficient allocation to get over scarcity. However, the foundation of Western economics was established quite later. The major principle, as well as the issue of this subject, is that humans live with unlimited wants but limited resources.
For this same reason, the notions of productivity and Efficiency are given utmost importance by economists. More effective use of resources, along with increased productivity, can lead to a high standard of living.
As mentioned above, the study of economics is divided into two primary disciplines – microeconomics and macroeconomics.
Microeconomics concentrates on how individual firms and consumers make their decisions. Basically, these individuals could be a government agency, a business, a household, or even a single person.
By evaluating specific aspects of human behaviour, microeconomics explain the response to alterations in the prices and why consumers demand a certain product at a specific price level. Furthermore, it also explains how and why varying products are valued differently, how individuals trade, how financial decisions are made, and the coordination takes place.
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And then, the topics of microeconomics Range extensively, from the dynamics of demand and supply to the costs and efficiency linked with producing services and goods.
Macroeconomics, on the other hand, studies the overall economics at the national and international level. It concentrates on a geographical region, a continent, a country or even the entire world. Topics include depressions, recessions, booms, business cycles that expand, the growth of production output as imitated by the alterations in the Gross Domestic Product, level of interest rates and Inflation, unemployment rates, government monetary and fiscal policy, and foreign trade.