Economic Theory
Every nations and country has their own strategy on how to improve and enhance their economic status. In each country, economy is very important because this is where the survival of the country lies. The progress of the economy depends the abundant resources or source of natural products and those people who are running it or manipulating it. These two factors should work hand in hand in order to determine the weakness and strength of each so that it will immediately fix if there are any loop hole in the transactions. Many people give importance and discuss about the usage of the economy and what is the really purpose of this why is it exists. Economy is already exists, but the years go by it keeps upgraded and improve by some theorist and economist. Economics is actually the study of social science in which it deals and studies the production, distribution and consumption of goods and services. Basically the status of an economy is the signs if the investments and infrastructures in business world are doing well or not. Economics is about social science that deals with the production, distribution and consumption of goods and services. When it talks about the production it depends the sources or resources of certain place if it is abundant or not. Here the economist makes feasibility study the place and the resources in which they could determine what certain products they are to produce. Then the economist studies how to distribute this to the consumers in safer and fastest way. Distribution talks about the types of the services being offered by the certain company in which their aims are to meet the expectations and satisfaction of the consumers. When it talks to consumption of goods and services it deals with the evaluation of the products, goods and services in which they are easily determine which areas or section is not performing well or having poor performance. Through they can easily patch up the discrepancies and problems that arise in their company so that they can easily revised their systems and methods of their management. The terms economic comes from the Greek for oikos (house) and nomos (custom or law) which means the rules of the household. Economics is so called a social science for the reason that it studies the society as well as the human behavior as a relationship between ends and scarce means which have alternative uses. In economics we have term the scarcity which means the insufficient supply of the resources and the demand of that products which comes from that resources is very high in which the resources are no longer compensate and the needs and wants of the people. Scarcity happens when there are circumstances that cannot be stop such as the natural disasters. The demands on this time are very high for the reason that the suppliers are not able to supply. The suppliers not able to supply for the reason that the resources are destroyed brings by natural disaster such as cyclones, hurricanes, earthquake and tsunamis. For instance, if a certain place is having a factory or companies that produce sea products, it can be altered if there is natural disasters such hurricane or tsunami for the reason that the workers are not able to go to the sea because of the risk. In this case they are not able get the supply as well as the demand is high for the reason that the consumers’ wants and need are not able to meet because they are also affected with the natural disasters. This situation is just only a sample why scarcity happens. Absent scarcity and alternative uses of available resources, the people can assure that they cannot experience the economic problem. The subject involves the study of choices as they are affected by incentives and resources. Furthermore, the other usage of economics that plays a significant role in developing of economy is that it explains how economies, as a economic systems, work and what the relations are between economic players which are the agents in the larger society. Methods of economic analysis have been increasingly applied to fields that involve people including the officials to make choices in a social context, such as a crime, education, the family, health, law, politics, religion and social institutions and war. With this information being given, these are the reasons why there are lots of theory evolves where there is only the same purpose which is to boost and enhance the economy.
The discipline of economics as we understand it today is a relatively recent development. Economic theory provides an outlet for research in all areas of economics based on rigorous theoretical reasoning and on topics in mathematics that are supported by the analysis of economic problems. Economic theory surveys for particular areas of research that clearly set forth the basic underlying concepts and ideas, the essential technical apparatuses, and the central open questions. The help of economic theory the economist have already a guide on how to manage and boost the economy. Modern economic thought emerged in the 17th and 18th centuries as the western world began its transformation from an agrarian to an industrial society. With this economic thought there are many of theories emerge for the reason that in economic theories are constantly changing. The theory of Keynesian is emphasizing on the activist government policies to promote high employment, dominated economic policymaking in the early post war period. With regards of this theory it clearly describes here the participation of the government in which it plays a major role in managing the economy. Government is important because they are the on who will control and finance the expenses in order to make the economy become progressive. In Monetarism theory it deals about the updates the Quantity Theory. In monetarism theory really concerned the numbers of products being produce for the reason that can immediately supply if ever the demand is high. It emphasizes the critical role of monetary growth in determining inflation. Rational Expectations Theory provides a contemporary rationale for the pre-Keynesian tradition in which there is restrictions or limitations of government involvement in economy. It argues that the market’s ability to anticipate government policy actions limits their effectiveness. The third theory is Supply-side Economics concerns with economic growth as a fundamental prerequisite for improving society’s material well-being. It deals with the products in order to save and invest if the nation’s economy is to grow.
These theories play an important role in order to make the economy become progressive because it provides concepts and ideas in analyzing the complicated situation and problems that deals with economic problems. The concepts and ideas being provided by the theories, it will serve as the guidance for the government on how to manage the economy with fewer expenses.
References:
Alison Alexander, James Owers, Rod Carveth, C. Ann Hollifield, Albert N. Greco; Lawrence Erlbaum Associates, 2004
Ray Marshall, Vernon M. Briggs Jr.; Irwin, 1989
Terry Black, Lynn Gallagher; Australian Journal of Management, Vol. 24, 1999
Mauricio G. Villena, Marcelo J. Villena; Journal of Economic Issues, Vol. 38, 2004
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Credit:ivythesis.typepad.com
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