Economics is the social science that focuses on the production, distribution, and consumption of products and services. Through the characteristics of the economy, it can be understood that it is a study that indicates how companies, people, countries and governments decide how to allocate resources.
This science is based on the actions of people, based on the assumption that they act under a rational behavior, which seeks to improve profits. Since there are different applications of work and different ways of acquiring resources, economics has a duty to determine the methods that achieve the best results.
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In this article you will find:
Important characteristics of the economy
Between the characteristics of the economy most important are the following:
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1. Economics as a social science
Society is the basis of the economy, therefore, it carries out the study of it, its needs, behavior and consequences and based on this establishes how to benefit society so that they can acquire something to change.
2. Link people's behavior to their needs
Despite the fact that sociology and anthropology study human behavior, economics also does it based on how it influences and impacts the human being.
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3. Has limits on the use of resources
It is a science that is responsible for studying how scarce or non-renewable resources should be better used.
4. Correct distribution of resources
The economy is in charge of maintaining a balance in the use of the resources of a country in order to benefit as many citizens as possible.
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5. Promote trade
Trade tends to represent a high level within the economy in general, due to the fact that it carries out the distribution of large quantities of products to consumers and also allows a greater source of employment to be generated that provides solidity to many people.
6. Government functions within the market economy
The government has a limited functioning in the market economy, however, it complies with the regulation of functions and thus guarantees correct compliance in order to avoid the formation of monopolies.
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7. Microeconomics
Business economics is microeconomic in nature, as it primarily studies business economics. Generally, business managers focus on the problems of their own business unit and not on financial difficulties.
8. Pragmatic approach
Business economics is pragmatic in its approach, because it does not involve itself in the differences of economic theory. Despite this, it does not put reality aside in the decision-making of the company by including abstract assumptions.
While economic theory separates itself from the reality of individual negotiations to create its own theory, management theory takes the correct line from the economic environment in which the business.
9. Macroeconomic analysis
Macroeconomics, which deals with the principles of economic behavior in general, is also very useful in business economics.
A certain business unit operates internally in an economic environment, which at the same time is determined by the behavior of the economy in general. Which indicates that a business manager has to be aware of the forces operating externally in his business environment.
The most relevant macroeconomic factors that are of greatest interest to business economists are business cycles, the accounting of internal income and the economic policies of the government that are linked to the activities business.
10. Normative
The economics of a company is also known by the name of normative economics, it determines standards for the formulation of norms and is more prescriptive than descriptive in nature.
In economics, everything that concerns economic behavior is explained, in the case of business economics, the rules that a manager must apply so that the objectives can be achieved and in economic theory, the laws of demand and yield are created decreasing.
11. Branches of the economy
In general terms, there are two fundamental branches in economics, these are positive economics that is responsible for describing and normative economics that focuses on prescription.
By creating propositions based on a number of assumptions, positive economics tries to explain the economic phenomenon, while normative economics suggests the appropriateness of the measures of the norms of the phenomenon economic.
12. Research and analyze
The economics of a company investigates and analyzes the how and why of the behavior in the company's actions, It also interferes with the rules that operate in the economy in general, where internal factors and external.
Economic systems are very important in the relationships that exist between economic actors and to better understand this system, one must take into account the characteristics of the economy, since they intervene in the decision-making that society assumes to evaluate its strengths and weaknesses. To see similar topics come to our website.
Sources and references:
- Miller T. (2021, January) WHAT IS ECONOMICS
- Economy (2018). Recovered from Economic Encyclopedia
