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Economics

Economics is the study of how society utilizes its limited resources to produce the most valuable and useful commodities and distribute them among different people. The key points are that resources are limited and human wants are unlimited. If the resources are available in plenty, then there would be no problem. Thus, economics is the choice-making and decision-making behavior of people. Therefore, the essence of economics is to acknowledge the reality of scarcity and then figure out how to organize society in a way that produces the most efficient use of resources.

The basic purpose of studying economics is to understand how various economies and their components work, how an economy is organized, and how successfully it achieves its basic objectives. The term economics is derived from two Greek words, ‘oikou’ and ‘nomos’, meaning the rule or law of households. Economics seeks to answer questions relating to the economic behavior of the people, society and the economy. To be brief, economics studies the economic behavior of people. In the early days, economics was not studied as a different subject. But nowadays, it has expanded to include a vast range of topics.
Now, economics

1. studies how prices and quantities of goods and services that are produced and sold in the market are determined by the demand and supply forces,

2. studies how the prices of labor, capital and land are set in the economy, and how these prices are used to allocate resources,

3. explores the behavior of the financial markets and analyzes how they allocate capital to the rest of the economy,

4. examines the distribution of income and suggests that the poor can be helped without harming the performance of the economy,

5. looks at the impact of government spending, taxes and budget deficits on growth,

6. studies the swings in unemployment and production that make up the business cycle, and develops government policies for improving economic growth,

7. examines the patterns of trade among nations, and analyzes the impact of trade barriers,

8. looks at growth in developing countries, and proposes ways to encourage the efficient use of resources, etc.

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