Economics is a  social science seeking to analyze and describe the production, distribution, and consumption of goods and services.
It is the study of the choices people make to cope with scarcity.

Micro vs. Macro Economics

 Microeconomics examines the economic behaviour of individual units such as businesses and households in the
face of scarcity and government interactions, as well as the economic consequences of these decisions on other
 Macroeconomics examines an economy as a whole with a view to understanding the interaction between
economic aggregates such as national income, employment and inflation.

Positive vs. Normative Economics

Positive (Analytical) Economics

  •  The branch of economic analysis that describes the way the economy actually works.
  •  Concerned with descriptive and conditional statements
  •  Descriptive – portray things as they are or have been in the past
  • Conditional – forecasts based on careful analysis of economic behaviour

 Normative (Policy) Economics

  • Makes prescriptions about the way the economy should work.
  • Deals primarily with statements that contain value judgments
  • Cannot be confirmed or refuted solely by reference to facts


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