Economics is the branch of knowledge concerned with the production, consumption and transfer of wealth. It helps in studying the manner in which people and markets interact and explains why people and government act in a certain way. Economics if subdivided into the following:
This branch of economics considers various aspects from a broad point of view, thereby analysing the economic output of entire countries, their position in international marketplace and how production is maximized by effective utilization of resources to encourage growth and success for future generations. The concepts of economic growth, phases in a business cycle, unemployment, inflation and monetary policy, fiscal policy – are well covered by this branch of economics.
This branch of Economic s focuses on the actions of individuals and industries within the economy, buyer-seller interactions, how businesses respond to price variations and fluctuations and how this impacts demand – thereby analysing the parts which make up the economy. Concepts such as appropriate production control through cost effectiveness and efficiency are well covered by this branch.
There are various applications of Economics. The economists describe and measure their observations with regards to economic parameters and concepts. They then propose explanation for such observations and develop various hypothesis and constructing models. Hypothesis testing is then done to understand if it should be accepted or rejected. If the model works well, the economists use it further to predict future buying behaviour.
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