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It is a systematic collection, classification and analysis of facts. Poincere, “Science is built up of facts as a house is built up of stones, but an accumulation of facts is no more a science than a heap of stones in a house.” Thus, following are the essentials of science: (i) A systematic study of facts, (ii) Certain rules and principles, (iii) Rules and principles of science are based on causes and effects, and (iv) Rules and principles of science are universally applicable. Scholars, who argue that economics is a science, put the following arguments in favour of their opinion: 1. Economic facts are analysed on the basis of these laws and principles. It Establishes Relationship between Causes and Effects: Economics establishes relationship between the causes and effects of economic events. Universality of Laws and Principles: Laws and principles of economics are universal.Systematic Study of Facts: Economics involves the systematic collection, classification and analysis of facts. Such relationship facilitates economic forecastings. They hold true in almost all the countries at all the times and in all the circumstances. Some scholars argue that economics is not a science.In the early days, the sole objective of business was to earn profit at any cost in order to accumulate wealth, gain economic power even at the cost of social justice.
Macro-economic examines the aggregates and averages of economic variables which included study of money, banking and financial institutions, general price levels, inflation theory of employment, income distribution, monetary and fiscal policies and problems of economic stabilisation.
Science is a systematised body of knowledge which establishes relationship between cause and effects. Use of Economic Laws and Principles: Study of economics involves the use of number of economic laws and principles.
There are many examples of Applied Economics such as Industrial Economics, Managerial Economics and Agricultural Economics.
In descriptive economics actual facts about a particular economic subject for the aim of study.
It has also to ensure that the available resources are efficiently utilised for the economic growth and welfare of country. Economics is to analyse the causes of these problems and to suggest a number of alternative courses which may help in tackling these problems.
Economics is also concerned with the increase in productive capacity of scarce resources and the rate of growth of economic development. According to Stonier and Haugue the subject matter of economics includes the following: The theoretical part of economics is economic theory.In other words, the society has to decide how to make the best and most efficient use of available resources.Modern view of economics is not confined only to the allocation of resources but is also concerned with the development of these resources.The economic theories and economic tools frame this part.This part is divided into static dynamic economics. Applied Economics tries to apply the results of economic analysis to descriptive economics.Indian Economics is the example of descriptive economics.Meaning of Business: Human beings in order to satisfy their needs take up many activities.Thus, managerial economics provides the link between economics and the decision science disciplines like mathematics, statistics, operation research, econometrics etc. Macro and Micro Economics: Macro-economic studies the functioning of the economy as a whole and micro economics analyses the behaviour of individual components like industries, firms and households.Micro-economics basically provides answers to the following questions: (i) What goods should be produced and in what quantity?The term ‘Economics’ has been derived from two Greek words ‘OIKOU’ and ‘NOMOS’ which, taken together, mean the rule or law of the household.At the initial stage of development of human civilisation, economics was confined to the efficient financial management of households.