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Wednesday, March 26, 2008

Understanding Economics

This post offers you simple explanation on what is economics, microeconomics, and macroeconomics.

Economics:


"the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."

-lionel robbins


''Economics is the study of how individuals and societies choose to employ those resources: what goods and services will be produced, how they will be produced, and how they will be distributed among the members of society. ''

-Britannica Concise Encyclopedia


Simple explanation: to observe how people like you and me making decision to fulfill our need and wants in the world of limited resources, and how a group of people determine to provide an adequate basic needs for society.

Microeconomics:

''a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources''

-wikipedia

Simple explanation: The study focus on basic economic player such as company (Petronas), individuals (you and me), and a household(a social unit living together) making choices and decisions while the resources are limited.

Macroeconomics:
''Study of the entire economy in terms of the total amount of goods and services produced, total income earned, level of employment of productive resources, and general behaviour of prices.''

-britannica Concise Encylopedia


''Macroeconomics is a branch of economics that deals with the performance, structure, and behavior of a national economy as a whole.''

-wikipedia

Simple explanation: Observation of an economy, example economy of Malaysia. Macroeconomics has an extension study of how a country handle and manage unemployment, national income, rate of growth, GDP (growth domestic product), inflation, and price level.

Economics is one of favorite subject when I was at University. It could really teach us about certain economics behavior. I am interested on how the government play role in economics; to decrease unemployment, to increase productivity, how they making decision, on what policy they have to implement.

All these things happen around us everyday, we could see whether it is good, or it is ridiculous decision the government made on certain issues.

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