Economics

Economics is the social science that studies how individuals, businesses, governments, and societies make choices about allocating scarce resources to satisfy their unlimited wants and needs.

Purpose of Economics

• To understand and predict economic behavior.
• To develop policies that improve economic welfare.
• To allocate resources efficiently.

Basic Concepts in Economics

Main Fields of Economics

• Microeconomics
  Studies the behavior of individuals, households, and firms and how they make decisions in specific markets.
• Macroeconomics
  Studies the overall economy, including economic growth, unemployment, inflation, monetary and fiscal policies.

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Types of economies describe how a society organizes production, distribution, and consumption of goods and services—specifically, who makes economic decisions and how resources are allocated.

Key takeaway

Most modern economies are mixed economies, combining market efficiency with government regulation to promote stability and social welfare.