What is Economics

There are a wide range of definitions that go along with the modern theory of economics. A few of these differences reflect the various views that are a matter of controversy amongst various economists. In the year 1776, Adam Smith defined political economy as a means of inquiry into the nature and the causes of the wealth attributed to each nation. J-B Say defines it as the science of production, distribution and wealth consumption by nations. Malthus provides a different explanation stating that it is more of a science that traces the various laws of the society, which is a powerful combination of wealth and the operation of mankind and the phenomena are not altered in the need to identify another object. 

Microeconomics is the branch of economics that deals with studying the various players of the market and the structure that is defined within each market. It also deals with irreducible base unit and the different public, private and the domestic players in the market. It also studies the interaction between the various players in the market especially when there is a scarcity of various resources that help in the making of the market happen. It also takes into account, the various aggregates of the quantity that is actually demanded by the various buyers in the market and the total sum of the sellers and help to identify the exact price per unit. The more specific specializations are the various divisions of labor, the gains obtained from trade and the comparative advantage that is benefitted.

Supply and demand are the two key features that seem to play a major role in determining the markets of the various goods and products that can be exchanged in an economy. The theory behind this is that there is an organizing principle behind the amount of products that are produced and the exact amount that is consumed and how the prices are determined. For a certain product or a commodity, the market demand is the quantity that enables buyers to purchase each specific good or a unit. The law of demand actually states that price and quantity in general are inversely related. Thus, higher the price of a product, the lower the number of people who actually purchase it and vice versa.

The Chicago School of economics is ideally well known for the various types of market advocacy and the monetarist based ideas. According to monetarists across the globe, market and economies remain constantly stable if the supply of money in the market remains at a steady pace. There are many in the world who accepts this theory explained by Milton Friedman and many other monetarists across the globe.

Economics has faced many assumptions that it is a subject matter of criticism and essentially relies on the aspect of unrealistic or highly simplified theories that are brought into place. Essentially, Economics can be explored at each and every aspect of this mode of desirable work and thus deliver ideal conclusions.

 

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