I hope you'll be fine and in good health. The topic of my blog is "Economics and its importance". Let's start with word economics, word "economics" means "management of the household". Or in another word, how people can earn maximum benefit from a limited income. Economics has two types, one is "microeconomics" and another is "macroeconomics". Microeconomics deal with the management of an individual and a firm or organization. While, macroeconomics deal with the management of a nation, economy and some other aspect of national income and inflation & deflation. Now, I'm going to discuss more the microeconomics and macroeconomics in my next two blogs. Let's get back on economics, economics is a science which is concerned with those aspects of social behaviors and institution that are involved in using the scarce resources to produce and distribute goods & services to satisfy human wants. Mostly study of economics is done by the business class, like businessmen and entrepreneurs. It is also essential for business class to study economics, so they are really aware of all the economic activities and armed them with the knowledge, through which they have prepared against economy two most dangerous factor, which is inflation and deflation. Economics can also benefit consumers, labors, agricultural & industrial sectors. Let's take a definition from Wikipedia:
” Economics is the social science that studies the production, distribution, and consumption of goods & services. Economics focuses on the behaviour and interactions of economic agents and how economies work."
Well, the thing is, there is no definition on which economist have agreed upon. In past, each of the definitions is criticized by the next new economists. Economics definition is categorized into three:
· Classical definition
· Non-Classical definition
· Modern definition
Importance of Economics
Economics is a social science. Whether it is directly or indirectly economics is concerned with the aim of the welfare of human beings. Study of economics is not only beneficial for business class, but also for the individual, who have to manage their households. Study of economics has many benefits for an individual or a nation, I'm going to mention a few of them here.
(1) Widening mental horizons:
Economics has a first effect on the mindset of the person. Economics increase the capability of man's thinking, understanding and deciding. The economy has many problems and they arise with time and study of economics can prepare a man for the depression and recession of economy.
(2) Benefit for the consumers:
Study of economics has also a benefit for the consumers. Human desire is unlimited and means to satisfy them are limited. Economics teach, how to get maximum benefit from minimum resources. Consumers can learn economics so they can manage their household expense to get the maximum benefit.
(3) Benefit for businessmen:
The person busy in business can be good businessmen when they have all the knowledge about the government monetary, fiscal and commercial policies. As businessmen are concerned with buying and selling of goods & services, therefore, they must have awareness about the tax system, economics fluctuation, currency, and banking system and forces of demand & supply. All of this information a businessman can get from the study of economics.