Economics

What is Economics?

The economy is a social science that is engaged in the production, distribution and consumption of goods and services. It examines how individuals, enterprises, governments and countries make choices regarding the allocation of resources to meet their desires and needs, and seeks to determine how these groups should organize and coordinate their efforts to maximize their results.

Economics analysis often passes through deductive processes, like mathematical logic, where the consequences of a particular human activity are considered within the framework of “through” tools.

The economy can usually be divided into macroeconomics, which focuses on the behavior of the aggregated economy and microeconomics, which is focused on individual consumers.

Types of Economics

Economics studies are usually divided into two categories.

Microeconomics focuses on how individual users and manufacturers make their decisions. This includes an individual, household, business or government organization. Microeconomics varies on how these people trade with each other, and on how prices depend on supply and demand for goods. The effectiveness and costs associated with the production of goods and services, how to divide and distribute work, uncertainty, risk and theory of strategic games, are also explored.

Macroeconomics studies general economics. It can be a separate geographical region, country, continent or even the whole world. Topics covered include government fiscal and monetary policy, unemployment, and growth, reflected in gross domestic product (GDP) changes and business cycles that lead to expansion, boom, recession, and depression.

There are also schools of economics thought. The two most common are classical and Keynesian. The classical view holds that free markets are the best way to allocate resources, and the role of government should be limited to the role of a fair and strict judge. In contrast, the Keynesian approach believes that markets do not work well only in the allocation of resources, and that governments should intervene from time to time and actively redistribute resources.

Some branches of economics thought emphasize empiricism in economics rather than formal logic — in particular, the macroeconomics or microeconomics of the marshal, who try to use procedural observations and falsified tests related to the natural sciences. Since real experiments cannot be created in economics, empirical economists rely on simplified assumptions and retrospective data analysis. However, some economists argue that economics is not suitable for empirical tests and that these methods often give inaccurate or contradictory answers.