What is Economics?

Kofie B Primus
Professor Soumyajit Sukul
ECON 210
15 November 2009

What is Economics?

Economics is the concept that contracts the manufacture, allotment, and use of produce and services. It is the study of how the use of inadequate resources will best satisfy the wants, needs and desire of the greatest number of people. The study of economics over the years as nations continues to connect globally has become tremendously important aspect. Economics consists of a large number of subdivisions with the two major ones begin macroeconomics and microeconomics. Macroeconomics encompasses the conclusion made by the people in the general public, such as the changes in interest rates that affects the national savings. Macroeconomics is the study of the complete structure of economics. Microeconomics consists of economics decisions made at a lower level. For example the change of a price item affecting an individual’s decision of purchasing that particular item. Microeconomics focuses on how the organization affects one business or parts of the economic structure. President Obama’s recent economic proposal is a perfect example of the economic force at work. The president proposed an income-tax credit of $3,000 for all new jobs above a company’s current employment level. The United States had proposed the “New Jobs Tax Credit” in 1977, which demonstrated economics at work in a perfect manner. The benefit on the dollar of credit is better with this approach and had become more target-effective. Evaluation results from studying the past “New Job Tax Credit” suggested that there were extensive effects in inspiring employment. Furthermore, the jobs that were created benefited particularly the low-wage workers. Since the limit on the credit per worker made it a more prominent for hiring lower-skilled, lower-wage workers. Theoretical work suggested that it’s particularly likely to be successful in an economy that is sliding further away from full employment, as we now are. The Real-Nominal Principle and the Scarcity Principle best described the situation above, with the first begin people choose. Consumers repeatedly like to get more productive resources than they can for example, human, natural, and capital which as we know are always limited. Subsequently, because of this key economic problem of scarcity, we usually choose the alternative that provides the most benefits with the least cost. Judging from the proposal made by President Obama mentioned above, People respond to incentives in predictable ways thus the use of the reality principle: This economic principle confirms that incentives are awards, or rewards that determine the choices people make. What matters to people is the real value of money or income, its purchasing power, not the “face” value of money or income. The incentives as mentioned above can turn out to be positive or negative, unfortunately when incentives change people change.

The study of economics has always been an interesting subject to me, one in which I hope will allow me to better understand how the economic market as a whole operates. As a student in this class I’m expecting to have fun understanding the market. But on a serious note I expect that in this class I will give me a better understanding of how the economic structure works. I’m convinced that the more knowledge I can apply to my job or personal life learning about interest rates, exchange rates, economic indicators, and equity. This will certainly improve my decision making process on investing in my future and obtaining mortgage rates. Basically my expectations from this class are both personal and professional, at the end of this class I think that I will have a better understanding of how the world works.

Reference
Perez, S. J., O'Sullivan, A.O., & Sheffrin, S.S. (2007). Survey of economics. 2007-02-15.

(2009, November 15). Economics. Retrieved from http://en.wikipedia.org/wiki/Economics

Gleckman, H. (2009, January 09). More On the new jobs tax credit . Retrieved from http://taxvox.taxpolicycenter.org/blog/_archives/2009/1/9/4051427.html

WERC, (2009, March 08). Barack Obama. Retrieved from http://www.globalresearch.ca/index.php?context=viewArticle&code=COO20090308&articleId=12601

(n.d.). Economics basics: what is economics?. Retrieved from http://www.investopedia.com/university/economics/economics1.asp