To know the Importance of Economics in Business, first we should talk about economics. Economics is the science that deals with the study of scarce resources that society needs to exist. Its production, distribution and reuse. These resources can be goods like; Food, clothing, technology, housing, etc. And among the services we can highlight; Health, education, housing, potable water, electricity and entertainment.
Economics is the science that generates relations between society and public and private administration, thanks to the economy we can measure the stability of a country, its development and growth in order to generate policies that tend to improve the overall welfare situation. Below are the various points, which show the importance of economics for business.
Points of Importance of Economics
- Allows know the basics of human needs, production, distribution, reuse and better use of resources.
- It provides the basis for exchange of goods and services between individuals, organizations and even countries.
- Generates systems, techniques and public policies to improve social welfare.
- Help to set target prices of goods and services.
- Adjust political, financial and even social imbalances.
- Provides knowledge and techniques that prevent crises and help them out.
- It uses econometric techniques to predict future economic conditions that could harm or benefit certain situations in acertain place, and how to maximize the benefits and problems mystify.
- As you can see, economics is a science that encompasses us completely.
- To be an expert in this field you can study a university degree in economics, in this course the student will learn how the economy moves and how to generate the best social conditions.
Every day we are bombarded with thousands of news Television, newspapers, magazines, radio or the Internet, we are always surrounded by an excess of economic data that dulls our heads, but that far from being much information, is not only the tip of the iceberg of What really happens in the world of economics.
Apart from these huge amounts of information, perhaps the worst of all is the use of the typical jargon of economists, which makes their understanding.. It is not focused with terms like “short positioning” “risk premium” “warrants” “CFD” Etc. And only those with an advanced degree in economics will be able to understand it, and even so, they even say that they understand nothing.
But in spite of everything, the economy interests us all, and that is why it is very important to understand at least the most basic mechanisms of the economy of the own country at least, and then to know the economy worldwide. Much needed concepts when it comes to voting for one candidate or another in an election. Every citizen should to know who defends their rights, and politicians are often differentiated, mainly, by how they handle economic issues benefiting one sector or another of the population. Knowing how to identify what situation you are in and which policy will benefit you, is up to you.
Economic fluctuations can affect various industries and therefore directly affect their work, be aware of this type of news. You can choose to change profession, prepare for another type of charge, etc. In addition to that particular level, you can make your own decisions about where to invest your savings.
When we talk about investment, it seems that we are talking only about the stock market, buying or selling stocks, and in fact, this type of investment has increased considerably in recent years, both the stock market and the funds are within the reach of anyone and a good way to do something with our savings. But the issue of investments is something more than the stock market and the funds, the investments cover topics as usual as buying a home, refinancing a mortgage, paying in an establishment with cash or using a credit card … all these Actions carry an economic position in their interior that requires to be understood, whose importance transcends to the last corner of our existence and our own life. The future may also be influenced by the current economy. The most obvious example is the fluctuations of a pension fund, the benefits or losses will depend on the economy of the country and the world economy. It influences the movement of oil, gold, raw materials, technological companies, agriculture. Each movement is affected by the laws of the economy and the interests or rates that banking institutions assign to us will be directly influenced by these macroeconomic data that affect us and influence each and every one of the individuals that form this society.
So we are going to stick with two very important concepts. The first, that the economy and the investments are intimately linked, and secondly that the decisions we make affect the welfare of our present and our future, and the more informed we are, the better the decisions can be taken, the economic changes that happen around them and adapt in the best way.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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