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What is economics?

Find out what economics is and how it can impact your personal life and create your personal story of success.

Economics definition

Economics carries out research and provides reliable data on prices, volumes and demand of goods and services. This science explains the market interaction and guides governments or people in the right direction with their business and planning.

what is economics

So, why do ordinary people from any country and from Nigeria in particular have to learn more about it? It is important, because economics deals with numbers, math and stats as well as with people, their life and wellbeing.

What does it study?

It studies social behavior and interactions of different groups of people; those are consumers and producers in particular. Such interactions determine wellbeing of people and wealth transfer from person to person, from company to company and even from country to country. The word “economics” came to English from Greek, along with many other terms. It consists of two parts, which mean “house” and “management”.

The word itself gives a clear idea on the importance of economics. Wish to be wealthy? Study this science to use it at home, in your family, at your company, etc. Economics is tightly related to profit and gains. The science has strong philosophy to back it up and it views things from the standpoint of getting profit.

Types and forms of economics

types of economic systems

People have come up with three major types applied throughout the globe. These systems greatly determine human values, ideal and style of life.

  • Capitalism
  • Socialism
  • Mixed Economy

Presently, there are two main terms used to describe those levels.

  • Macroeconomics.
    It means this science is applied to study the wellbeing and profitability of entire countries or regions of the world.
  • Microeconomics.
    It deals with personal or corporate, and maybe even industry profitability and efficacy.

Everything in this world starts with an idea or thought developed into a philosophy. The modern economics philosophy came about in 18th century through a man called Adam Smith. He is considered to be a “father” of present day science.

Now, economics can take different forms and follow certain models, such as market economy, traditional one, mixed or planed economy. This science is tightly related to politics. In many cases, the type of economics in the country is determined by its political system and political “beliefs”. For example, such a country as USSR had planned economy installed and based upon the ruling party values – Marxism and Communism.

Leading economics of the world

what is economics 2Now, when you have the definition of economics, we should take a look at the top leading countries in this area. The volume of economics is determined by GDP (gross domestic product) volume. In 2015 USA takes the first place in the world and it is closely followed by China. The third place is taken by Japan. However, some experts believe Chine would soon overtake USA by the GDP growth and volume.

Why is this important and how can it affect Nigeria? Well, the top countries of the list have certain privileges. They are the key world players and they can settle issues and borrow money, if they need do. They are the decision makers.

The good news is that recently Nigeria got promoted and obtained a higher standing among other countries. Formerly it was considered to be a country with low level of income. Such a status has significantly limited the opportunities for further development. However, presently Nigeria got upgraded to a new status of a country with medium position of income. It enables it to borrow more money for further development and get a lower interest rate.

What is more, this year Nigeria was able to beat the record and come ahead of South Africa. Nigerian economy is considered to be the top economy of Africa. This means Nigeria is growing and developing; it’s evolving. Naturally, the wellbeing of the country affects the wellbeing of people living in it, but it works the other way around, too.

The richer people get, the better it is for the entire country or region. So, why economics is important? Understanding this science can help people get wealthier on their personal level and affect the wellbeing of the country.

On the other hand, if the country management knows and uses economics science properly, they increase the wellbeing of their land and help its people to do well. The question is: can there be poor people in a rich country? The answer is yes.

READ ALSO: Most lucrative business in Nigeria – 5 top ideas 

Your personal knowledge and understanding of economics can make a difference: you can be rich in a poor country or poor in a rich one. Information, knowledge and skills play the key part in your personal wellbeing. However, a country with rich and smart people living in it cannot possibly be poor!

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