Economics looks at the behavior of individuals and firms present in the economy and the factors that influence their decisions. It is here where notions of production, consumption, demand, supply, price, and elasticity are analyzed. On the other hand, the study of how nations, states, governments, and industries make decisions that affect the greater economy and the entire business cycle in the economy is closely analyzed in macroeconomics.

Main schools of Economics

Classical ascribes to the ideals of a free market policy whereby all players and forces in the market are left to interact and allocate resources within themselves. Government intervention is limited and is said to be like that of a referee.Keynesian - This school of thought acknowledges that at times the market forces are insufficient to allocate resources efficiently. It also acknowledges that markets fail. Thus, it remedies the intervention of government to correct market failure and to allocate resources efficiently.

What is Economics?

Scarcity being a major factor across the board, be it with individuals or nations, it is imperative for all parties to embark on the efficient allocation of resources for the achievement of set objectives. Some of these decisions may involve choosing specific goods and services and forgoing others. These decisions also form the subject matter of economics.

There are two common schools of economic thought namely:

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What is Economics?

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There are two common schools of economic thought namely:

This article is available only to alvexo plus members, register now, and get 7 days of free membership.

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