Scope of Economics?

Scope of Economics?

The scope of economics is the area or boundary of the study of economics. In scope of economics we answer and analyze the following two main questions: (i) What is the subject matter of economics? (ii) What is the nature of economics?

The subject matter of economics is divided into two: i) Micro economics ii) Macro economics

1. Micro economics–

   Micro economics the word micro has been derived from Greek word Micros means small or little. Micro economics deals with the analysis of small individual units of economy such as buyers, sellers, individual farms, industrial units or a group of

According to Boulding– Micro economics is the study of particular firms, particular household, individual prices, wages, incomes, individual industries, and particular commodities.

Now, we can sort-out Micro economics in following ways-

1. Market Economy- i) Theory of demand (Consumption),
2. Theory of production (a+b= theory of product pricing).
3. Theories of distribution – i) Rent, ii) Wages, iii) Interest & iv)

1. Welfare

2. Macro economics-

   Macro economics the word macro is derived from the Greek word Makros means large or total and therefore macroeconomics deals with the economic activities in the According to Boulding– Macro economics deals not with individual incomes but with national income, not with individual prices but with price level; not with individual output but with the national output. Macro economics is concerned with the economic activity as a whole or in totality.

According to Samuelson– Macro economics is the study of the behavior of the economy as a whole. It examines the overall level of a nation’s output, employment and prices.

Now, we can sort-out Macro economics also in following ways-

1. Different policy measures to solve the major economic
2. Economic problems- Poverty, unemployment, national income, general price level, inequality in income and wealth, inflation and deflation etc.
3. Policies- Monetary, Fiscal, Industrial, Trade

So, the main goals of macroeconomics policy are-

1. Sustainability,
2. Full employment,
3. Price stability,
4. Equilibrium,
5. External balance,
6. Equitable distribution of income and wealth,
7. Increasing productivity.