What do you mean by Economics?

Economics refers to the optimum allocation of resources to meet the needs and requirements of people for goods and services. Resources are scarce and unlimited wants of people cannot be fulfilled. Therefore, economics study helps in making these decisions. The resources revolving in a society are land, labor, and capital. The system through which the resources are allocated in an economy is known as a market system. This market system helps people in carrying out trade transactions between themselves and across borders.

There are two divisions of economics that are Microeconomics and Macroeconomics. Microeconomics studies individuals and industries and the dynamics between the sellers and the buyers. It makes a study on how businesses and households make decisions on prices, purchasing, competition, and industry. Whereas, Macroeconomics analyses the economic activities of a country and things like inflation, interest rates, taxes, unemployment, and growth. The study of economics is essential to develop intellectual skills and enhances decision making power.

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