Economics

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Face-to-face trading on the New York Stock Exchange's trading floor.

Economics attempts "to explain the way in which individuals interact with one another, to use their limited resources to satisfy their alternative ends." [1]

It has also been defined as the study of the allocation of scarce goods and services.[1] It is a social science, concerned with how people produce, distribute, and consume. Governments can be classified by their economic policy. The U.S. Constitution provides basic protections for private property that are the foundation of American economic policy.

Issues in economics

Economics deals with a large number of issues:

Disciplines within economics

Economics is a very broad discipline, and involves the following other disciplines as well:

  • Moral philosophy: How ought a society produce and distribute goods and services?
  • Psychology: What principles underlie human economic decision-making?
  • Mathematics: What mathematical models can predict economic outcomes?
  • Ecology: How and in what quantities do households consume goods?

Branches of economics

  • Microeconomics: the study of economic decisions of firms and households acting in markets.
  • Macroeconomics: the study of aggregate economic decisions and the results of those decisions in a local, national, or world economy.

History of economics

Main article: History of economics

Economic thought originated with the rise of the state. Classical economics, or the long-run model, was articulated by Adam Smith and has since fomented the rise of free-market capitalism in economic thought.[2]

References