This short article is a general overview of the what economics is and its functioning in light of recent significant events, in particular the Great Recession and its lasting impact. Economics can be the study of drama – human action! Well, a social science that studies the production, distribution, and consumption of goods and services. A great place to start is to read Economics In One Lesson. Henry Hazlitt succeeded in reducing the whole teaching of economics to a few basic principles which are easy to understand for beginners, his way of explaining economic theory has a simple logic which instantly hooks the reader’s interest. The economic way of thinking shows us how economies function through individual behaviour and interaction in the marketplace. Economics is divided into (1) microeconomics – studying the individual factors and effects of individual decisions, and (2) macroeconomics – studying the collective factors and collective decisions. Microeconomics covers such things as the markets buyers and sellers economic interactions within households and firms. Macroeconomics covers such things as the whole economy and scales general economic factors, such as unemployment, interest rates and monetary and fiscal policy.
Economics is derived from the Greek word “okionomia” translated “household management. Economic writings date from earlier than the 14th century, and continue to play an important role in relevant debate and current market events. Economics can be useful in explaining the causes of such events as the Great Depression of the 1930s which brought mass unemployment in the production process, and since then other prominent financial crises to mention are the ones of 2007-2008. The Great Depression sadly left many suffering the consequences of the economic downturn. Threating a collapse of large financial institutions, bank bailouts, and stock market losses. The banks liquidated their loans causing evictions, foreclosures and key businesses to close prolonging unemployment. Consumer wealth decreased trillions of US dollars. These events inevitably lead to the 2008-2012 global recession, see the Mises Daily article on The Long History of Government Meddling in the American Marketplace.
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Copyright © 2016 Zoë-Marie Beesley
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