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The Importance of Economics and the Understanding of the

In: Business and Management

Submitted By rampantcoltidaho
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Pages 5
Running Head: THE IMPORTANCE OF ECONOMICS AND THE

The Importance of Economics and the Understanding of the

Circular Flow Model and its Place in Society

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Abstract
Economics as a whole is a tool for understanding and studying production, distribution, and consumption of goods and services. Economics is concerned with the resourcefulness of scares resources with an optimum contentment of economic wants. Human beings are not only impacted by economics, but they are also considered to be a scarce resource in the way of labor power. Because humans are both the moving force of Economics and a resource behind Economics, the impact to society that Economics has is inevitably strong. With economics we, as a people, function in a trade system that is self sustaining and self regulation with minimal government interference. The intent of this paper is to show how Economics impacts society through the cyclical system that is designed by nature to evolve with the changes in demands of the time.

Introduction No matter where you are from or where you go, Economics is a factor that will impact you and your well being. Economics is from the Greek word οίκος [oikos], meaning 'family, household, estate', and the word νομος [nomos], meaning 'custom, law', hence "household management" and "management of the state". Economics is a social science that typically studies the production, distribution, and consumption of goods and services. Economics is a social science, and its area of study is human activity involved in meeting needs and wants. Economics: It is the social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants (McConnell, 2006). Macroeconomics is the economics sub-field of study that considers aggregate behavior, and the study of the sum of individual economic decisions.

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