Relevance of Economics In

Modern Society

ANKITA BISWAS
ROLL NO. 246
DEPARTMENT OF ECONOMICS
BETHUNE COLLEGE
Introduction
“Economics is a study of mankind in the
ordinary business of life.” So wrote Alfred
Marshall, the great 19th-century
economist, in his textbook, Principles of
Economics. “Economics is a study of
mankind in the ordinary business of life.”
So wrote Alfred Marshall, the great 19th-
century economist, in his textbook,
Principles of Economics. Also with the
modernisation and globalisation of the
society, the relevance of economics is
increasing every day.
What is Economics
The word ‘Economy’ comes from the
Greek work ‘Oikonomos’ which means one
who manages a household. Economics is
concerned with the optimal distribution of
resources in society. The subject involves,
understanding what happens in markets
and the macro-economy, examining
statistics about the state of economy and
explaining their significance,
understanding different policy options and
evaluating their likely outcomes.
Economics is the important you get to
know how societies, governments,
businesses, households, and individuals
allocate their scarce resources. The
economics can also provide valuable
knowledge for making decisions in everyday
life.
Economists are well known for advising
the president and Political parties on
economic issues, formulating policies at
the Reserve Bank, and analyzing economic
conditions for investment banks,
brokerage houses, real estate companies,
and other private sector businesses. They
also contribute to the development of
many other public policies including
health care, welfare, and school reform
and efforts to reduce inequality, pollution
and crime.
Some important points
about Economics
 Economics provides a mechanism for
looking at possible consequences as
we run short of raw materials such as
gas and oil.
 A critical divide in economics is the
extent to which the government
should intervene in the economy. For
example – should the government
provide health care free at the point of
use or is it more efficient to encourage
private health care.
 The free market leads to countless
examples of market failure. I feel one
of the best uses of economics is to
provide solutions to overcoming
market failure.
 One of the principal jobs for
economists is to understand what is
happening in the economy and
investigate reasons for poverty,
unemployment and low economic
growth.
 Economic forecasts are more difficult
than understanding the current
situation. However, although forecasts
are not always reliable, they can help
give decision makers an idea of
possible outcomes.
 Economics is not a definitive science
like Maths. Because of many unknown
variables, it is impossible to be
definitive about outcomes, but a good
economist will be aware the result
depends on different variables, and
there are different potential outcomes.
This should help avoid an overly
ideological approach.
 Modern economists have examined
economic forces behind everyday
social issues
Relevence of economics
in Modern society
Economics is the important you get to
know how societies, governments,
businesses, households, and individuals
allocate their scarce resources. The
economics can also provide valuable
knowledge for making decisions in
everyday life.
Let us look at some questions:
 Why the financial crises of 2008 in
USA affected the whole world?
 Why people were unemployed
during Great Depression of 1929,
and what’s depression, BTW?
 Why Venezuela is suffering with
hunger and upheaval?
 What made Greece to land on the
ground?
 Why Haiti and Dominican
Republican, though are on the same
island, differ in their nations’
condition, drastically?
 Why diamond is more expensive
than water, even when water is a
necessity and diamond is just a
piece of luxury?
 Why India is has so many poor in
spite of its annual growth is much
higher than that of UK?
 Why there is a mode of currency
and what is the requirement of
Banks?
 What would happen to India if some
rich oil-sources are discovered
within its territory?
Well, these kinds of questions are having
some crispy answers but what makes them
related and similar is that- all the problems
in the questions are developed by humans.
It is not any physics or chemistry, its about
psychology of human beings. And when this
psychology meets up with the things
around you: the money, people, goods,
services, profits, technology, etc., then there
is the emergence of the study of Economics.
Its just a social science of studying people
that how would they react and what should
economists do to control that reaction. But
the twist comes here when we look the
patterns in the human behaviour and adjust
the lens of mathematics to predict future
and make lives.
Economics is important because its all
around us: the stuffs we eat, the income we
get, the teachers who teach us, the mobile
phones and computers we use, the land
where you are staying in, the language we
are reading in, everything.
Importance of
Economics in modern
world
Economics is subject with innumerable
importance. Here are some of them:
Economics for sustainable growth
Understanding humans, and their
motivations, is critical to designing
initiatives that can have social and
economic impacts upon society at a local,
regional and national level. This isn’t an
idealised notion—whole nations have
transformed themselves for the better
through the incorporation of economic
principles in their policies, like China, South
Korea and Singapore, to name a few.
Economics helps us identify the policy
measures that encourage prosperity and
avoid inefficiency, making it a crucial driver
in the search for sustainable growth.
Understanding customer behaviour
In business, economists can provide key
insights into how to make a product or
service appeal more to customers by de-
constructing their incentives and desires.
The deep insights into customer behaviour,
business strategy and volatile markets that
economics provides can help companies
make intelligent decisions to promote
greater business growth and success.
policy areas. Outside of government,
economic principles help guide the
business decisions and actions that
help foster a prosperous society.

Economics is everyday life

In our daily lives, we are called to make

choices at our homes and in the
marketplace, how much to spend and save,
how to allocate our savings between
different kinds of financial assets, whether
to take a regular cab or an Uber, how much
to pay for health insurance, whether to
switch jobs, to move to a different city,
where to go for vacation, and so on. These
decisions are so much a part of our
everyday life that they are also the domain
of much of what politicians constantly
make promises to us about.

Not just demand and supply

Economics underpins many of the

phenomena unfolding around us every day.
From driving Jio to offering free internet
along with phone services and the use of
box office earnings to determine the next
bollywood star, economics also determines
the price and the variety of mango you will
choose to buy once the monsoon arrives

Conclusion:
For society, economics provides a
scientific approach to analyzing and
understanding government decisions
for ensuring stable economic growth
with low inflation and the highest
possible level of employment.
Economic methods also provide the
tools by which policy analysts study
the possible costs, benefits and effects
of government policies in a range of
areas, from national security to health
care and education. Presidents appoint
economists to advise them on national
economic policy, as well as other