Economics is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behavior and interactions of economic agents and how economies work.
Microeconomics analyzes basic elements in the economy, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers.
Macroeconomics analyzes the entire economy (meaning aggregated production, consumption, saving, and investment) and issues affecting it, including unemployment of resources (labour, capital, and land), inflation, economic growth, and the public policies that address these issues (monetary, fiscal, and other policies).
In the meaning of economics, the term ‘Economics’ owes its origin to the Greek word ‘Oikonomia’, which can be divided into two parts: oikos means home and nomos means management.
Economics is broadly classified into two types
- Microeconomics is a branch of economics that studies the behaviour of individual consumers and organisations in the market. It focuses on the demand and supply, pricing, and output of individual organisations.
- Macroeconomics examines the economy as a whole and deals with issues related to national income, employment pattern, inflation, recession, and economic growth.