Economics is focuses on the behavior and decision making of an economy as a whole. In terms of the total amount of goods and services produced, total income earned as well as the level of employment of productive resources, and the general behavior of prices. It expands display that describes the relationship between national income, output, consumption, unemployment, inflation, government spending, and international trade. There are three central topics for economic research on a national level: output, unemployment, and inflation. Economists also utilize aggregate measures such as gross domestic product (GDP), unemployment rates, and the consumer price index (CPI). Economics also studies trade among different countries. It includes the problems related to economic growth or an increase in per capita real income. It studies the functions of money and theories relating to it.
Importance
Economics is important as it explains the working of the economy as a whole. Governments as well as multinationals use it to establish economic policies and strategies. Government use economics as a means to guide fiscal policies to prevent calamities. It explains the factors that influence the balance of payment. Thus, it also solves economic problems such as poverty, unemployment, inflation, etc. It helps firstly to achieve the goal of economic growth, a higher GDP level and then higher level of employment as a result to bring stability in price levels and analyses change in business activities.
Objectives of Economics
The objectives of economics include economic growth, full employment, price stability, and social objectives. The objective of full employment is the uppermost amongst the policymakers. In other words, a free enterprise capitalist economy always displays full employment. One of the objectives of economic policy is to ensure price level stability. This goal prevents economic fluctuations and helps in the attainment of a regular growth of an economy too. There is no balance in economic growth in a market economy. These economies experience ups and downs in their performance. One of the important criteria to measure the performance of an economy is; the rate of increase in output over some time. To attain some social ends or social welfare we use economic policy which means income distribution needs to be more fair and equitable. Thus, in a financier market-based society some people get more than others. In conclusion, to ensure social justice, policymakers use economic policy instruments.
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