It’s been two years since 2019; we continuously hear the news of the staggering of the economy in many countries.
I hope you all know why?
The pandemic of covid-19 adversely affected the economy of many countries due to lockdown situations.
But to understand these circumstances, you should know what the economy is and how it matters for us?
Economics undeniably play an important role in our personal and professional life. Moreover, it allows us to analyze our past, plan our future and implement our present.
Do you know what roles it plays in our lives?
Don’t worry; in this blog we will discuss the significance of economics in our personal and professional lives. But before discussing the importance of economics in our lives, we should know what economics is?
Definitions of Economics
According to Collins English Dictionary-
Economics is the study of the ways to organize money, trade, industry in society.
According to Thomas Sowell (American Economist)-It is the study of cause and effect relationships in the economy.
We can say the economy is a social science because it uses scientific methods to know the scarcity of resources and how it is exchanged in society.
Economists know how to create efficiency in the world. In contrast, they help to develop policies in government with the help of different theories and techniques.
Types of Economy
We study two types of economy.
Macroeconomics(large scale)- It includes the study of a nation’s and government’s decisions.
Microeconomics(individual level)- It focuses on the individual and business decisions only
Significance of economics
In defeating poverty
Economics study helps to eradicate the poverty of a country and enhance living standards. Poor resources and less production and technology used are responsible for the poor living standard of a country and poverty.
Economics tells us how to satisfy human needs with scarce resources.
The economists deeply understand where we need to provide more help and where fewer resources are needed. Moreover, it helps to avoid the wastage of scarce resources.
Gives the knowledge of economic systems
Economics teaches us how complex forces work in economic systems. It studies the producer and consumer, labor and the management relationship, and more.
In addition, it also tells how one sector has an impact on another sector. The administration is impossible or not effective if there is no knowledge of economic systems working. So, to make an effective administrative economic system is a must.
Teaches the modern techniques of production
Economics helps us to discover new techniques and methods of production. It also focuses on how to produce at a low cost. Economics knowledge is beneficial for a business person to a labor leader. In contrast, the study of economics gives the new mechanism to decide the optimal allocations of limited resources.
Helps in preparing appropriate budgeting
It is useful for the proper budgeting of houses and companies. Economics knowledge enables the owner, whether of a house or a company, to properly budget according to the needs. It boosts the careful spending and happiness of the family and business.
Boost the national wealth
The study of economics helps increase the national wealth by discovering the latest factors. Present governments are focusing on economic planning, especially due to the pandemic of covid-19.
Planning aims to eradicate poverty by boosting national income and wealth. It also focuses on the distribution of wealth.
Can we do all this planning without the study of economics?
No, we can’t do this without knowing economics.
Assists in the planning of budget
Economics matters a lot for the finance minister of any country as it helps in the taxation system. It is beneficial for planning a budget and mitigating unemployment. Moreover, deep knowledge of economics is needed for the accurate money supply, effective credit system, and the efficiency of the banking system.
Help in law framing
Legislations and parliaments can frame laws properly only when they have the practical knowledge of economics. The economic policies help the voters to choose the best representative for them. A stable economy is essential for the survival of a nation in the long run and better economic practices can ensure a stable economy for development.
Enhance the optimum utilization of resources
Economics studies enhance the proper utilization of resources by calculating and checking the opportunity cost. When the opportunity cost is minimum, it gives the maximum profits. So the use of the opportunity cost principle is useful for the better growth rates for a country.
Ensure Individual Growth
The study of the economy is also essential for the financial growth of individuals. The theoretical side of economics may not be needed for a person, but the basic economic practices can save him from going bankrupt and lead a healthy and wealthy life.
Other significance of economics-
Some other economic significance are below.
- It gives forecasts for the economy and businesses.
- It focuses on how to control market failure.
- Economics helps in understanding consumer behavior.
- It works on how to achieve social efficiency.
- Economics helps in inventory management.
- It helps in price determination.
- Positive vs Normative Economics
- What are The Key Importance of Economics in The World?
- What Is Economics And Why Economics is Important?
Scope of Economics
After knowing the significance of economics now, you have gotten how economics is crucial for us. Economics is essential for our personal and professional growth. Moreover, this subject has a varied scope.
The study of economics gives you a deep understanding of economic theory and its implementation in the real business world. In addition, it develops various skills like-
- Better communication skills
- Problem-solving ability
- Numeracy skills
- Time management skills
Due to these skills, this subject is in high demand at present or in the future also because economics deals with the growth of the world and individuals.
When you complete your economics study with an accounting and finance degree. Moreover, it offers various career opportunities for the degree holders. You will be able to make your career in-
- Consultancy and government etc.
In this blog, we have discussed the economics and significance of economics. Economics exists everywhere, from our home to our office or workplace. When we study economics, we get to know various terms such as GDP, inflation, NNP, and how to work on them.
I hope this blog will be helpful for you in understanding the importance of economics in our daily life. This pandemic period of almost two years has presented a clear picture of our staggering economy and inflation. People think twice before investing somewhere in this challenging time. In contrast, this thinking of a human to analyze a situation is called economics and utilization of resources. Get the best do my economics homework for me service at the best price.
Frequently Asked Questions
What is economics in simple words?
Economics is the study of decisions made by humans regarding the scarcity of resources. These decisions can be made by individuals, families, business owners, governments, etc. We can not run away from scarcity, it is a truth of life, but we can manage the use of limited resources.
We want more than what is available. For example, we want more goods and products, but resources to produce them, such as labor, tools, land, and raw material, are limited. So, to deal with demand and supply chain, economics is vital.
What is the use of economics in our daily life?
In our practical lives, we make decisions at our homes, market, and workplaces, how much we need to spend and save, how to invest out saving for the assets we need, whether to take a taxi or own vehicle, how much need to spend on grocery or home items, Where to go in vacations, What should be introduced in the company for the employees, etc. These decisions are a part of our lives. In all these decisions, we apply economic practices.