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What is Economics


Economics is the social science that studies the production,distribution and Consumption of goods and services.Economics focuses on the behaviour and interactions of economic agents and how economics work.

Definition of Economics 

The word economics has been derived from the Latin word "Oiko Nomos"
which means household budget. This explains how the persons of a house 
manage to earn money and spend it. Later on this word was usedoing on 
state called "Polos". This explains that how the people of a state use to spend 
their lives and earn means of living. For thisome reasonso it was better called 
as "Political economy". However these two words were separated and become
separate disciplines. The first one become political science and later one the 
subject of economics.



Evolution of Economics 

The evolution of the definition of  economics has passed through various stages.
However it can be broadly classified into three school of thought.

(1) Classical school of thought              (1723------1790)
(2) Noe-Classical school of thought     (1842-------1924)
(3)London school of thought 



J.M.KEYNES'S Definition

Keynes in his book "General theory of employment, interest and money"
published in 1936 gave a modern definition of Economics.

"Economics is a science which creates employment opportunities and from
 ways to increase GNP by making efficient utilization of the scarce sources"


Important points

Economics includes the activites of those people living in societies and not 
of those living in far flung area like Robinson cruse, Saint etc.
It includes only "material welfare" of human beings no the non-material 
welfare. It includes both individual and collective efforts of man.
The purpose of every economic effort of the human being should be the 
material walfare. So Economics relates to that part of wealth which is 
concerned with the ""material walfare".


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