Eco Concepts Part1

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Ever wonder what  Economics is and how it works? How those fancy headlines of "The Economist" or "Financial Express" mesmerize us to an extent where we start thinking that its a sanctum science just for the elite and privileged class.
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Worry Not...
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You have landed in the right place to understand the nuances of the economic activities and become a rookie economist. Though I am also one.

So, without further adieu lets start with the understanding of economics..

What is Economics?

Economics refers to activities related to production, consumption, and transfer of wealth, goods or services.

Sounds simple.... It is !!! But indeed there are some strings attached...But let's just keep it simple for now.....
  

Eg:

1. Ramu, a security guard in an apartment receives his monthly salary and with that, he buys groceries, pays his daughter's school fee, pays rent etc. All his activities are a component of economics.





2. Shriram, a software engineer takes his car to a service station for annual service is also contributing to the economy by using service of the service station. His demand for service has given birth to need of labor, spare parts etc.


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Ok, so now we have a basic understanding of economics, let's move forward to understand the classification of economics. There are two broad classifications:

1. Micro-Economics: 

Microeconomics answers the question related to an individual, family, a firm, a particular industry etc.

Eg :

1. How does the rise in the price of petroleum products affect the monthly bills of Mohanty?
 


2. How the increase in demand for cars affect the steel industry?

2. Macro-Economics:

Macroeconomics answers question related to larger dimensions i.e. the problem of a country as a whole. It looks into the broader dimensions of an economy.

Eg: 

1. How an increase in taxes affect household savings of the country?


2. How decrease in cash supply affect the borrowing trends in a country?






So this was just a brief introduction of the subject.

We will learn more concepts in the next session. Be aware this blog is not for seasoned economists but the common learner. 

Keep watching this space ...

Chao🙋
Prashant