By: Riya Fernandes
Considering taking an Economics course soon? Is it a potential major or minor for you at the university? Or perhaps you're studying it but feel like you're missing some fundamentals. Do not be concerned; we have you covered! Here is a quick introduction to economics for beginners, where you will learn some fundamental ideas.
Did you know Economics is a Social Science?
Science is any organized body of knowledge. However, science is not limited to courses in physics, chemistry, math, and other related fields. These are the sciences of nature. Social science is a subfield of science, too. Social science examines how people behave in society from a variety of angles. As it examines how people behave with regard to money, economics is a social science. It examines how people manage their limited resources to fulfill their desires or meet their needs.
A short introduction
The name "Economics," which refers to household administration, comes from the Greek word "Oikonomia." Another description for it is "managing affairs of the house," or how people earn and spend money in accordance with their means of subsistence or level of luxury.
As time went on, the term grew to refer to the nation as a whole trying to earn and meet its requirements from limited resources. Therefore, in earlier times, economics was also known as "Political Economy." American economist Paul Samuelson referred to economics as the "Queen of Social Sciences."
Three types of Economic systems - Easy to remember!
Capitalism (aka free market economy): meaning the law of supply and demand, rather than a central government, regulates production, labor, and the marketplace. The famous idea of the invisible hand is also related to this theory.
Socialism (aka command economy): The government controls the economy and makes all economic decisions regarding society. For example, it owns businesses and land and decides what to produce and the number of goods being produced.
The Soviet Union until its breakup in the late 1980s was an excellent example of a command economy. Cuba and North Korea are good examples in today’s world of command economies
Mixed Economy: A mix of both capitalism and socialism. Such a mixed economy embraces the free market when it comes to capital use, but it also allows for government intervention for the public good. The United States is a good example of this type of economic system.
Branches of Economics.
The terms ``Microeconomics" and "Macroeconomics'' were created by Sir Ragnar Frisch. Both of these terms have their roots in the Greek words ‘Mikros’ and ‘Makros’ respectively. Micro denotes individualism, whereas macro denotes aggregate.
Microeconomics
Microeconomics is an individualized field of study. It investigates specific businesses, certain households or a sole proprietorship, a person's income, an industry, or the prices of specific goods. It covers various topics, including examining how separate economies behave, setting prices, dividing the entire economy into units, examining how economic variables evolve, examining market structure, etc. Microeconomics' application is relatively constrained. The overall state of the economy is not addressed. As a result, it only touches a small portion of the national economy.
Macroeconomics
In macroeconomics, the aggregates are studied. It researches the whole economy. The output and input of a nation, total employment, national revenue, investments, savings, etc. are all included. Macroeconomics is concerned with business cycles, income and employment, growth and development of the nation's economy. Macroeconomics examines the country's economic growth by taking into consideration the relationships and interdependencies among numerous economic variables. In the long run, macroeconomics is helpful in recommending policies to the nation for its financial progress.
Here are a few books to checkout for you to slide through Economics as a beginner!
● Economics - A Beginner's Guide by James Forder
https://www.goodreads.com/en/book/show/24886791-economics
● Basic Economics by Thomas Sowell
https://en.wikipedia.org/wiki/Basic_Economics
● The Economics Book- Big Ideas simply explained.
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