http://www.whatiseconomics.org/

http://www.whatiseconomics.org/

What is Economics? A Definition of Economics

Ever wonder why food costs rise when gas prices spike? Ever question why U.S. politicians worry when other countries talk of going bankrupt? Ever wonder why you can’t get a good interest rate on your savings account? All of these phenomena can be explained through 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. Since economics is a driving force of human interaction, studying it often reveals why people and governments behave in particular ways.

There are two main types of economics: macroeconomics and microeconomics. Microeconomics focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders. Macroeconomics, on the other hand, takes a much broader view by analyzing the economic activity of an entire country or the international marketplace.

A study of economics can describe all aspects of a country’s economy, such as how a country uses its resources, how much time laborers devote to work and leisure, the outcome of investing in industries or financial products, the effect of taxes on a population, and why businesses succeed or fail.

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.

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 second theory known as Marxism states that capitalism will eventually fail because factory owners and CEOs exploit labor to generate wealth for themselves. Karl Marx, the theory’s namesake, believed that such exploitation leads to social unrest and class conflict. To ensure social and economic stability, he theorized, laborers should own and control the means of production. While Marxism has been widely rejected in capitalistic societies, its description of capitalism’s flaws remains relevant.

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.

As one can see, economics shapes the world. Through economics, people and countries become wealthy. Because buying and selling are activities vital to survival and success, studying economics can help one understand human thought and behavior.

Read more oneconomics 101.

Get ready with a presentation about what Economics is answering the following questions 1) What does Economics as a science study? 2) What types of economics do you know? Give their definitions 3) What do economists do? 4) What is the Classical school? What does it study? 5) What is Marxism? What are the main points of studying there? 6) What is the Keynesian School? What are the principles of work does it have? 7) Why is it important to study economics?
Vocabulary
costs	to succeed
to rise	to fail
a price	to maximize
to spike	to create
to go bankrupt	to maintain financial stability
an interest rate	to encompass
savings account	to behave
to wonder	to establish
a production	to benefit
a consumption	to restrict
a wealth	efficiency
a transfer	an owner
to produce	to exploit
to obtain	a labor
goods	to generate
to interact	an exploitation
a market	a social unrest
to accomplish	a class conflict
goals	to ensure
to reveal	means of production
a government	to reject
microeconomics	to remain
macroeconomics	flaws
a buyer	relevant
a seller	to promote economic stability
a borrower	to reduce
a lender	to increase
to invest	stagnant
an outcome	to spend
an industry	to influence
a laborer	vital
to devote to	to survive
a tax	survival

Дата добавления: 2015-11-04