The Theory Of The Economy

Economics is the branch of knowledge concerned with the production, consumption, and transfer of wealth. Economics can even be used a few different ways. They are the study of scarcity, the study of how people use resources, or the study of decision-making. One of the central tenets of economics is that people want certain things and will change their behavior to get those things according to American Economic Association. The economic study ranges from the very small to the very large. Much of economics involves the use of data gathered by governments, businesses, or in the laboratory to test the hypotheses about whether a certain program, event, or incentive will have the expected effect. Our nation is affected by economics in the way that you work, spend money, eat, simply just how you live on a regular

The economy is the system of how money is made and used within a particular country or region.

Economics is often called the "science of decision making." The decisions that economists analyze range from personal decisions such as how big a pizza to order or whether to buy or lease a new car to the decisions the federal government makes about things like the size of our military. Economists use information about these, and other decisions, to develop indicators that can be used to determine the health of our economy. Just as a physician relies on indicators such as temperature, blood pressure and heart rate to determine the health of a patient, economists use indicators like gross domestic product growth, the unemployment rate and the rate of inflation to predict our

The circular flow of income model is a theoretical representation of the economy. It shows the distribution of income within the economy and the interaction between the different sectors in a modern market economy. The five-sector model is a more elaborate model in comparison to the basic, two, three and four sector models. The model represents an economy like Australia and divides the economy into five main sectors.

What is economy? Everyday there is news about the economy. Everyone has complaints and recommendations pertaining to the economy, but often is largely misunderstood by many people. Most people are concern about the day to day activities of the economy rather than the overall cause and effect that happens within the economy. In the video, Ray Dalio explains how the economy work similarly to a machine. He explains that the economy is made up of simple transactions that are driven by human nature which creates three main forces that drives the economy. The total spending, which is adding money and credit, is what drives the economy. The relationship between the income and spending of everyone plays an important part of the economy because someone’s

For example, when a good is scarce, the prices goes up, so consumers try to avoid buying and therefore conserving the resource. Then, the suppliers want to find more of the source as to get a better profit. The reasons behind their actions are selfish, yet they benefit all of society. Smith identified that the pursuit of profit and the power of self-interest would increase motivation and result in more advances in technology. His model of capitalism was on the basis of freedom and selfishness as a motivator for society. It was also on the basis that the economy would go through recessions and expansions but fix itself. Recessions are periods in the economy in which unemployment goes up, while profits and spending goes down; a slowdown of the economy. An expansion is essentially the exact opposite. The classical model of economics states that the economy will continue to go through these fluctuations over time and will fix itself with no help, thus not needing a government to give influence.

Shown above is the Circular Flow Diagram showing the macroeconomic relationship between households and business, what they provide to each other and receive in return. In the case of my business, a taco restaurant, the relationships shown above can be seen clearly. My restaurant would be part of the businesses sector, providing goods in the form of tacos to the product market and ultimately the households. The households would consume these tacos on the product market and send back money to my business[6]. The households would provide resources to my business in the form of workers who can be hired to the resource market and ultimately to myself.

“The economy is all aspects of a society that relate to the production, distribution, and consumption of goods and services” (Day & Schiele, 2013, p. 13). Production is farming and manufacturing of good, distribution is the marketing of products being bought and sold and tax transfers, and consumption is the using up of goods and services, which keeps distribution

The Economy is the backbone to society. There are many factors that operate in, and govern our society’s economical structure. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, and economic costs and profits all contribute to what is known as the economy. These properties as well as a few others, work together to influence the economy. Microeconomics and Macroeconomics are two major components. Both of these are broken down into several different components that dictate societal norms and views.

In the field of Economics, valuable theories and analysis are based on previous economics research and studies. Peer reviewed scholarly journals, economics studies publications, economics research institutions, and online economics databases are the leading sources in the field of economics. Experts and researchers in the field of economics focus on the study of cause and effect of economy by investigating reliable sources such as politics, culture, world ideology etc. Research and writing sources in Economics can be distinct from other discipline because large authoritative information is interpreted by figures, statistics and graphics. Researchers in the field of economics focus on how variables affect economy as a whole and they predict responses to future changes in market conditions or policy.

The study of an economic world is a complex and unpredictable undertaking, involving people buying, selling, investing, bargaining and persuading. As a result of it being broad and complex, it is divided into many disciplines to make reason from information given by the economy.

Originally coined by Bernhard London (1932) in the context of the Great Depression, up to this date there is no generally accepted definition of planned obsolescence. According to a common definition by Tim Cooper, planned obsolescence is “the outcome of a deliberate decision by suppliers that a product should no longer be functional or desirable after a predetermined period” (Cooper, 2010, p. 4). Another frequently cited definition was formulated by industrial designer Brooks Stevens: “Instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary” (cit. in Adamson, 2003, p. 4). Whereas the former definition emphasises the planning involved in designing products, the latter foregrounds the manipulation of consumer desires and implicitly argues that these desires have become detached from 'actual ' human needs.

Imagine a peaceful world where nobody argued about anything and everyone was at peace. That would be nice, but not possible in reality. There is at least two sides to every story, or in this case two sides to every subject. Economists’ have different views on the world, and they cannot agree on a single viewpoint. There is the popular, mainstream economists, known as the neoclassical economist and there are the heterodox economists’ which covers the nonmainstream views. Although the mainstream economics is the one taught in school, its assumptions are there to achieve a certain outcome. The heterodox economist’s assumptions are based on the fact to eliminate extraneous factors. I believe that heterodox economics will start to be considered more in the world of academics and may take the place of the current mainstream economics.

The principal limitation in utilizing national income accounts for representing the standard of living within a particular country or even throughout the world in general is that there is a very basic assumption in this methodology. That assumption, of course, is that the standard of living is equated with consumption. Areas of the world that have higher national incomes as represented via a variety of different ways such as per the calculation of the Gross National Product or the Gross Domestic Product have the ability to purchase more. As such, they are likely (but not definitely) to have fewer problems in terms of basic human standards such as being able to provide food, clothing and shelter for an individual and his or her family.

In Hawaii, economy has a big impact in our society. Economy is us, people who brought business industries and tourism. The difference between economy and economics is that economics is where people have a control of what sort of behavior they are presenting as of now. According to the book of ECON 130 Principles of Microeconomics, it delivered that the economy is simplified as, “an abstraction referring to the grand sum of all our production and consumption activities.” This points out that money is a sum of how people can be responsible to decide how they can use scarce resources that affects market outcomes and other things, “What we collectively produce is what the economy produce; what we collectively consume is what the economy consume,” this specified that it goes in a circle of how much people can preserve to work and what it will come as (“ECON 130 Principles of Microeconomics”). Employment in Hawaii is increasing because of high demand in tourism, new business comers, and more job opportunities for the people.