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Relevance of Economics In

Modern Society

ROLL NO. 246
Introduction health care, welfare, and school reform
and efforts to reduce inequality, pollution
and crime.
“Economics is a study of mankind in the
ordinary business of life.” So wrote Alfred
Marshall, the great 19th-century Some important points
economist, in his textbook, Principles of
Economics. “Economics is a study of
about Economics
mankind in the ordinary business of life.”
 Economics provides a mechanism for
So wrote Alfred Marshall, the great 19th-
looking at possible consequences as
century economist, in his textbook, we run short of raw materials such as
Principles of Economics. Also with the gas and oil.
modernisation and globalisation of the  A critical divide in economics is the
society, the relevance of economics is extent to which the government
increasing every day. should intervene in the economy. For
example – should the government
provide health care free at the point of
What is Economics use or is it more efficient to encourage
private health care.
 The free market leads to countless
The word ‘Economy’ comes from the
examples of market failure. I feel one
Greek work ‘Oikonomos’ which means one of the best uses of economics is to
who manages a household. Economics is provide solutions to overcoming
concerned with the optimal distribution of market failure.
resources in society. The subject involves,  One of the principal jobs for
understanding what happens in markets economists is to understand what is
and the macro-economy, examining happening in the economy and
investigate reasons for poverty,
statistics about the state of economy and
unemployment and low economic
explaining their significance, growth.
understanding different policy options and  Economic forecasts are more difficult
evaluating their likely outcomes. than understanding the current
Economics is the important you get to situation. However, although forecasts
know how societies, governments, are not always reliable, they can help
businesses, households, and individuals give decision makers an idea of
possible outcomes.
allocate their scarce resources. The
 Economics is not a definitive science
economics can also provide valuable like Maths. Because of many unknown
knowledge for making decisions in everyday variables, it is impossible to be
life. definitive about outcomes, but a good
economist will be aware the result
depends on different variables, and
Economists are well known for advising there are different potential outcomes.
the president and Political parties on This should help avoid an overly
economic issues, formulating policies at ideological approach.
the Reserve Bank, and analyzing economic  Modern economists have examined
economic forces behind everyday
conditions for investment banks,
social issues
brokerage houses, real estate companies,
and other private sector businesses. They
also contribute to the development of
many other public policies including
Relevence of economics in the questions are developed by humans.
It is not any physics or chemistry, its about
in Modern society psychology of human beings. And when this
psychology meets up with the things
around you: the money, people, goods,
Economics is the important you get to services, profits, technology, etc., then there
know how societies, governments, is the emergence of the study of Economics.
businesses, households, and individuals Its just a social science of studying people
allocate their scarce resources. The that how would they react and what should
economics can also provide valuable economists do to control that reaction. But
the twist comes here when we look the
knowledge for making decisions in
patterns in the human behaviour and adjust
everyday life. the lens of mathematics to predict future
and make lives.
Let us look at some questions:
Economics is important because its all
 Why the financial crises of 2008 in around us: the stuffs we eat, the income we
USA affected the whole world? get, the teachers who teach us, the mobile
phones and computers we use, the land
 Why people were unemployed where you are staying in, the language we
during Great Depression of 1929, are reading in, everything.
and what’s depression, BTW?

 Why Venezuela is suffering with Importance of

hunger and upheaval?
Economics in modern
 What made Greece to land on the
ground? world
 Why Haiti and Dominican Economics is subject with innumerable
Republican, though are on the same importance. Here are some of them:
island, differ in their nations’
condition, drastically? Economics for sustainable growth

 Why diamond is more expensive Understanding humans, and their

than water, even when water is a motivations, is critical to designing
necessity and diamond is just a initiatives that can have social and
piece of luxury? economic impacts upon society at a local,
regional and national level. This isn’t an
 Why India is has so many poor in idealised notion—whole nations have
spite of its annual growth is much transformed themselves for the better
higher than that of UK? through the incorporation of economic
principles in their policies, like China, South
 Why there is a mode of currency Korea and Singapore, to name a few.
and what is the requirement of Economics helps us identify the policy
Banks? measures that encourage prosperity and
avoid inefficiency, making it a crucial driver
 What would happen to India if some in the search for sustainable growth.
rich oil-sources are discovered
within its territory? Understanding customer behaviour

Well, these kinds of questions are having In business, economists can provide key
some crispy answers but what makes them insights into how to make a product or
related and similar is that- all the problems service appeal more to customers by de-
constructing their incentives and desires. policy areas. Outside of government,
The deep insights into customer behaviour, economic principles help guide the
business strategy and volatile markets that business decisions and actions that
economics provides can help companies help foster a prosperous society.
make intelligent decisions to promote
greater business growth and success.

Economics is everyday life

In our daily lives, we are called to make

choices at our homes and in the
marketplace, how much to spend and save,
how to allocate our savings between
different kinds of financial assets, whether
to take a regular cab or an Uber, how much
to pay for health insurance, whether to
switch jobs, to move to a different city,
where to go for vacation, and so on. These
decisions are so much a part of our
everyday life that they are also the domain
of much of what politicians constantly
make promises to us about.

Not just demand and supply

Economics underpins many of the

phenomena unfolding around us every day.
From driving Jio to offering free internet
along with phone services and the use of
box office earnings to determine the next
bollywood star, economics also determines
the price and the variety of mango you will
choose to buy once the monsoon arrives

For society, economics provides a
scientific approach to analyzing and
understanding government decisions
for ensuring stable economic growth
with low inflation and the highest
possible level of employment.
Economic methods also provide the
tools by which policy analysts study
the possible costs, benefits and effects
of government policies in a range of
areas, from national security to health
care and education. Presidents appoint
economists to advise them on national
economic policy, as well as other