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Economics is a term that is used to refer to a social science that specializes with the production, distribution and consumption of goods and services. It was earlier referred to as political economics. However, this gave the science a political orientation. Therefore, economists decided to just call it economics. This gave it a wider coverage in lives of people. This is the reason why economics touches lives of all people. Therefore, it is right to conclude that economics is of immense importance and is worth to be studied.
Importance of Economics
Economics is essential in financial lives of people. When a person studies economics, he/she is able to understand cycles of money. Money is the most universal utility that people use. There is no single person who can claim that he/she does not use money. There are people who have lots of money, while some are in poverty. The understanding of economics is a crucial factor to consider when analyzing financial positions of people. People who have studied economics have better knowledge of money cycles that those who have not. Therefore, they are likely to know how to deal with this money. In short, an economist has the ability to know why whatever he expected did not happen. Therefore, a person who understands economics has a better chance of managing his/her finances than one who does not. This is the one sector that needs economics to understand. In every aspect that economics covers, there is the large scale factor and the small scale factor. The financial position of a country constitutes its economy. This explains the wealth, as well as the financial position of a country, and how it fairs in the competitive world. This is in a large scale. There are micro economies, which exist at a much smaller scale. Here, the people involved are less than those in macro economies. The control of these economies depends on economics. Therefore, management of finances largely depends on economics.
The quality of life is determined by decisions that relevant individuals make. Economics mainly deals with the making of decisions by these people. However, these are mainly financial in the financial world. To begin with, economics deals with the production and manufacture of goods. This is a critical stage in the dealings of any investor or business person. Economy studies the demand and supply of products. This helps the producer to determine which goods to produce. It also helps to determine the proportion to which goods should be produced. It shows the business person what to do and when to do it. This is one decision that economics helps in making. Secondly, economics deals with the consumption of goods and services. This constitutes the demand for a product (Mankiw, 2011). The study of this is crucial for any business person. For example, a business might produce a product in large proportions only to suffer losses. The solution to such a problem lies in economics. People who have studied economics are able to predict what happens if they produce a certain product. Therefore, such people cannot have excess production. This is because goods they produce are in accordance with the expected demand. In above scenarios, it is clear that decisions of people are most affected by economics. That is the extent to which economics affects lives of people.
Most of the issues that require government intervention in a nation apply to economics. For example, politics, unemployment and of late, the environment, require a considerable deal of economics to be dealt with. In any country, especially in the developing countries, unemployment is a key issue. The rate of unemployment can be reduced by knowledge of economics in the country. Therefore, most countries have economic experts to deal with this problem. The creation of jobs applies economics and ensures that unemployment rates are minimal. The political world is also affected by economics. Therefore, the study of economics is vital for the determination of political temperatures at the nation level and in the international level. In the real sense, any money dealings require economics to be successful. Therefore, people need to study this science to make sure that their financial lives do not get disoriented. They should use this knowledge in making decisions that mostly affect their financial lives.
Apart from the financial aspect of economics, it also has the social aspect. As mentioned earlier, economics is a social science. To begin with, economics deals with the distribution of resources. Through this, it introduces a social aspect. This causes the study of people, and makes their interrelationship simpler. Karl Marx believed that the society is formed by two main groups, bourgeoisie and proletariat. The initial represents the people who own means of production in the society. These means may include power, resources and influence necessary for the production and manufacturing of goods and services in the society (Lietz, 2000). The latter represents the group of people in the society who only have their labor to offer. For this reason, they are often oppressed. This is a sociological issue and perspective of looking into the matter. However, the application of economics in the matter cannot be denied. The study and identification of these opposing groups require economic analysis. Therefore, it is clear that sociology also depends on economics. Therefore, it is a fundamental science to pursue. It helps to sustain the life of an individual on a small scale and the whole nation, at large. Economics also deals with money at a large scale. In return, money and its possession create social classes. The division of people in a region is mainly due to the financial status that they are in. This shows the extent to which economics is useful in other aspects of life. For this reason, its study should be considered most valuable in the society.
From the essay above, it is evident that economics is an extremely broad term. Therefore, it is certainly relevant in everyday life. This is because its coverage allows it to have an effect on lives of all individuals. It manifests itself in both large scale and small scale. Therefore, it is necessary to pay some attention to the science due to its relevance. It is experienced and seen in financial matters, hospitals, businesses and in many other day-to-day operations. Therefore, its importance cannot be overlooked.