Economics :
Economics is the study of the production
and consumption of goods and the transfer of wealth to produce and obtain those
goods. Economics explains how people interact within markets to get what they
want or accomplish certain goals.
Economics is often referred to as
"the dismal science.
Types of Economics :
There are two main types of economics:
1.Macroeconomics .
2.Microeconomics.
Microeconomics :
Microeconomics focuses on the actions of
individuals and industries, like the dynamics between buyers and sellers,
borrowers and lenders.
Macroeconomics :
Macroeconomics, on the other hand, takes
a much broader view by analyzing the economic activity of an entire country or
the international marketplace.
Economist:
People who study economics are called
economists. Economists seek to answer important questions about how people,
industries, and countries can maximize their productivity, create wealth, and
maintain financial stability. Because the study of economics encompasses many
factors that interact in complex ways, economists have different theories as to
how people and governments should behave within markets.
Father of Economics :
Adam Smith, known as the Father of
Economics, established the first modern economic theory, called the Classical
School, in 1776. Smith believed that people who acted in their own
self-interest produced goods and wealth that benefited all of society. He
believed that governments should not restrict or interfere in markets because
they could regulate themselves and, thereby, produce wealth at maximum
efficiency. Classical theory forms the basis of capitalism and is still
prominent today.
A more recent economic theory, the
Keynesian School, describes how governments can act within capitalistic
economies to promote economic stability. It calls for reduced taxes and
increased government spending when the economy becomes stagnant, and increased
taxes and reduced spending when the economy becomes overly active. This theory
strongly influences U.S. economic policy today.
