Economics

                                                 Economics

   The title of my theme is “Economics”. Firstly I am going to tell you about history of economics, how its developed and about the most well-known economists of different times. Then I’ll tell you about two major branches of economics as macroeconomics and microeconomics, what they study. After that I want to look economic systems, what these are and their main concepts. The following part of my topic is macro environment in which I’ll look its major components. And the last part is international economics as the study of the world economy.

   The most important definition of this theme is economics from which I have to begin. Economics is the study of the way in which mankind organizes itself  to solve the basic problem of scarcity.

   I want to begin from history of economics. Economics developed gradually. In the 1500s existed a lot of sciences like religion, philosophy, mathematics. But no economics. Then came the Enlightenment in which reasoning replaced God as the explanation of why things were the way they were. Enlightenment thinkers would answer the question “Why am I poor?” with “Because of the nature of land ownership”. At this time amount of information expanded so rapidly that it had to be divided for an individual to have hope of knowing a subject. In the 1700s the sciences were split into natural sciences and social sciences. And soon in the early 1900s social science were split into economics, history, geography, sociology, anthropology, and psychology. Adam Smith was one of the first scientists who pointed out most of the insights about how the economic system worked. His first work was The Wealth of Nations. Adam Smith was a social philosopher who covered all aspects of social science. The other economists that time were Thomas Malthus, John Stuart Mill, David Ricardo, and Karl Marx. These writers were called classical economists. Alfred Marshall continued in that classical tradition. “Principals of Economics” is the most main his book.

   Economics is divided into two major branches: macroeconomics and microeconomics. Macroeconomics is the study of behavior of the economy as a whole with emphasis on the factors that determine growth and fluctuations in output, employment, and the level of prices. Macroeconomics studies the factors that determine inflation, unemployment, and growth in the production of goods and services. The other major branch of economics is microeconomics. Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. This is a contrast to macroeconomics, which involves the "sum total of economic activity, dealing with the issues of growth, inflation, and unemployment. Microeconomics also deals with the effects of national economic policies (such as changing taxation levels) on the aforementioned aspects of the economy.

   There are many forms of economic order, ranging from the mixed private enterprise system to partially or completely controlled economies. Economic system is the system that a society uses for allocation and distribution of scarce resources. The economic system is composed of people, institutions and their relationships to resources, such as the convention of property. There are some main functions of any economic system. One is to provide some means of resource allocation. This function is often basically performed by the price mechanism. This means the main determination “demand for and supply of” goods and services interact to set their market price. Next main part of economic systems is a system of distribution. Without a system of distribution economy simply could not exist. A major part of this distribution system is credit. Without this vital financing function being performed, the economy would doubtless be forced to a lower order of production. Economic systems also include some goals for a nation. They are price stability, full employment, economic growth, and equitable distribution of income. All these goals help firms or individual to make decisions.

   I think everybody heard about macro environment. Macro environment is the network of systems composed of culture, political and economic forces, technology, skill mixes, and consumer groups. Let’s view some of its major components. For example, political forces classified as the form and role of government in a society. It consist of national, state, and local laws, political parties. The political system is coupled with the economic system. The economic system is concerned with the allocation of scarce resources and the provision of some form of distribution. All these systems affect an organization.

   The study of economics would be incomplete without an understanding of the nation’s role in the world economy. The study of the world economy is known as “international economics”. International economics embraces two broad areas of interest: international trade and international finance. All nations trade because they have different quantities and qualities of economic resources and different ways of combining them. As a result, each country can produce certain goods more efficiently. At the same time each government have to protect a domestic market, help to sell goods profitably and so many countries establish higher standards of quality for various kinds of imported goods than for similar goods produced domestically.

   Well, I tried to examine economics. I can tell a lot about this area of science, but I think I told all necessary things about my theme.