Economics is the social science that studies how individuals, groups, and societies allocate their limited resources in the face of scarcity. It examines how people make choices about production, distribution, and consumption of goods and services. Economists analyze various factors that influence these decisions, including costs, benefits, incentives, and the behavior of individuals and institutions.
Economics is often divided into two main branches:
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Microeconomics: This branch focuses on the behavior of individual agents, such as consumers and firms, and how they interact in markets. It studies concepts like supply and demand, price determination, competition, and market structures.
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Macroeconomics: This branch looks at the economy as a whole and analyzes broader economic phenomena, such as national income, inflation, unemployment, and economic growth. It considers aggregate measures and how government policies can influence the overall economy.
Economists use various models and theories to understand and predict economic behavior, and they often apply quantitative methods to analyze data and assess economic performance. The insights gained from economics can be applied to a wide range of real-world issues, including public policy, international trade, and environmental concerns.