The economy and economics are today’s #1 concern for most Americans, and it is in the spotlight during this presidential election. But many Americans often have an unclear idea of what economics mean.
Strictly speaking, economics refers to the study of people and businesses using financial resources.
Financial resources include time, talented people, property, assets, equipment, buildings and other tools. These resources may also include knowledgeable people who can effectively use the available products and services. All economic issues include the right amount of time spent at work, in school, for recreation and how many dollars to spend or save to produce additional goods and services.
Economics and politics may blend together to influence the vote, level of taxes and the government’s role in stimulating the economy.
People use economics in their daily living. For instance, they might combine their resources, such as their time, money, assets, and education, to improve their own well-being. An individual’s well-being may include the happiness they receive from the products and services they consume, the enjoyment of working a stress-free job, spending time with family and friends, and personal involvement in their community.
Unfortunately, people may not always use their resources to improve their own well-being.
The government does use economics to study labor, land, investments, money, income, and production, and taxes. Businesses hire economists, or people who measure well-being, and determine how it can increase over time.
Economists also look at the differences between rich and poor people. Economists may also address how businesses, industries, governments and countries work together to stimulate well-being. They will look at the production factors of these functioning entities, including growth, costs, and trade. Businesses use economics to determine what people will buy through supply and demand. It also includes the importance of competition and restrictions on monopolies.
Similar to the board game, a monopoly means one business has outplayed their competition. This can have severe consequences for the country’s overall economic stability, because competition increases the options for consumers.
Economics allows an entire society to do business by analyzing what people, businesses, private corporations, governments, and countries need and want. By using this data, others can produce goods and services to increase profits. In addition, individuals can learn to make wiser decisions to increase their livelihood, which in turn leads to a sense of well-being. This satisfaction comes from managing personal finance habits, such as saving money earned, spending less, buying necessary items, and focusing on investments earn profit over time.
Understanding these basics of economics can show how businesses and consumers rely on each other to survive. In other words, businesses can not hire employees without a consumer base to buy their products. If people do not have jobs, then they cannot consume and support businesses. This can spiral out of control if left unchecked.
Economists help predict future trends to deter this from happening in the future.
Economic References for Teachers
- Stockton Center For Economic & Financial Literacy – Teaching AP Economics
- Federal Reserve Education
- Education – Federal Reserve Bank of New York
- What’s the Economy for Anyway?
- Jump$tart Coalition
- Review of Economic Principles
- Peanuts & Crackerjacks: The Economics of Pro Team Sports