What economics is all about?
Starting with the Monday foundations of economics, or a series of introductory articles on economic science, we will reflect on what economics is.
In the simplest terms, economics is a science about economic processes. As every cognitive science, economics examines its subject of research, trying to notice the dependencies and regularities occurring in it, and then describe them and present them as economic laws.
Put simply, economics tries to answer questions such as what elements make up economic processes (inflation, GDP, interest rates, unemployment, business cycle and thousands of others). Economics distinguishes each of them, trying to best examine and describe how and if one element affects the other.
For example, how the increase in the interest rate affects inflation, as for unemployment, and as for a given stage of the business cycle. How taxation affects the gray zone, how it affects the budget, and how much you earn and the level of household expenses. How the change in the exchange rate affects the level of exports and imports and how it affects the economic development of the country. How the cost structure of an enterprise affects its competitive position on a given market.
Thus, economics examines how economic processes proceed, taking into account the fact that people using resources have a limited number of them. How a person copes with a shortage of resources. Which resource uses, how it allocates and how this allocation process proceeds. What is produced? How does a person make decisions about what to produce and what not?
Economics is a social science, not a strict one. He stands in line with sociology and psychology, not mathematics and physics.
Economics is a science that studies human behavior. All economic phenomena result from human activities. Price changes, increase and decrease in unemployment, production volume. All this results from decisions and actions taken by people.
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