Education - ECONOMIC THEORY: Is Economics About Money?

Is Economics about money? Yes and no. No, Economics is NOT specifically about money, but yes money is one resource that is studied via Economics.

Economics Definition

Economics is the study of the allocation and use of rare or limited resources (everything in the universe is somehow limited, except God's love). These resources are Land, Labor, and Capital (Money) and recently Technology. Economics is just as much about labor or manpower and land as it is money.

Categories/Divisions/Disciplines Of Economics

From a theoretical standpoint, applied Economics is separated into two sub-disciplines: Positive Economics is objective and fact-based (open to being tested and proved or disproved), whereas Normative Economics is subjective and value-based.

To allocate or employ a resource (Land, Labor, Capital, Technology) to one use deprives it to another (Opportunity Costs). The overall idea of Economics is to study current allocation and then optimize resource usage and maximize output. It's all about efficiency.

Macroeconomics Versus Microeconomics

The study and data of Economics itself is broadly divided into two other basic divisions: Macroeconomics and Microeconomics. 

Macroeconomics deals with the big picture, the aggregate economy composed of all the total micro parts of a nation or industry or total industries.

Microeconomics deals with the study of particular parts or companies or industries within the larger macroeconomic picture.

Economics: Supply And Demand Law

In either study, one grand notion is that everything is based upon Supply and Demand. Yes, 99% of the time Supply and Demand have an inverse relationship. Everything is a function of Price, which is the equillibrium of Supply and Demand.

As Price Rises (Supply), Demand Lowers (Quantity). When Price Lowers, Demand Rises. (This holds true for all but Veblen, Giffen, and Luxury goods -items that people will buy more of to demonstrate prosperity, etc - brand names, fancy cars, jewelry, etc..).

Economics Conclusion

Economics is a science, and as time goes by it becomes more and more exact and useful when the data is properly implemented. The problem is that Social and Political positions are often diametrically opposite of Economic facts. Solutions that look and seem popular and kind are often the most Economically unsound....

~ Jimmy Hall, MS/BBA (404-580-1501) is owner of Jimmy Hall Writing Services, and writes effective business plans, resumes, blogs, web content, and other written items. I am he; give me a call for assistance!