What is Economics?

What is Economics?

The Living Legend

Ahmad Javed Kamran Amiri

Dated: Thursday 2^nd January 2020

The literal / true meaning of the word economy:

Economics is derived from the Arabic word "intention", which means mediocre attitude and moderation, if it is in any part; Economics is a Greek word meaning EKOS, the law of the house and nomos, the administration or law. So Ekonomos says to the housekeeper that the word was first used by xenephone before the festival.

Definition of Economy:

Economists have different definitions for economics, some of which are as follows:

* It is important to analyze all activities related to production, distribution, consumption, trade, exchange and distribution.

* Economics is the study of how humans use limited resources (nature, labor force, capital) to produce, distribute, and consume goods and services.

* To meet the unlimited needs and wants of human beings in a good and appropriate way, with limited resources. This definition has been called the more comprehensive definition.

The limiting resources, also known as manufacturing factors (used in producing goods and services), are as follows:

1.  Nature: Agricultural land, forests, minerals, water sources, air, sun, land and all sources underground, can be a contributing factor that varies significantly in each area of ​​production.

2. Labor Force: Physical and mental activity to produce goods and services is called physical and mental activity by the use of force and body, and mental activity is the production of wealth and services by the mind. Such as using mindfulness and planning to produce advanced and new machines.

3. Capital: There may be different definitions of capital such as:

a. Money, goods, labor, and more are taught by bookkeepers in accounting.

b. Total investment and total production equipment for a single business or company.

c. Capital is all the generated resources used in the production of goods and services such as the machine itself and in the production of other goods.

4. Entrepreneur: The product combining the above mentioned production factors is called the person who started the production of goods and services.

As mentioned above, human needs and wants are unlimited and productive factors are limited, so economics seeks solutions to meet human needs and wants through unlimited resources and answers the following questions;

·           What commodities should be produced and for who be produced?

·           How much should be produced?

·           How to produce?

·           How to distribute, and who have to use it?

The topics of economics that answer the above questions are part of macroeconomics and part of macroeconomics. Before we start the discussion, it is good to briefly describe the types of economics, first dividing the economy into two major groups, macro and macro.

Microeconomics: Generally examines the activities of consumers, producers, as well as needs, deductions, valuations, pricing, and types and functions of the market.

Macroeconomics: Macroeconomics is total income, productivity, consumption, backwardness, capital gains, overall price levels, employment, economic growth, inflation (inflation, inflation) and so on. The investor discusses issues related to the economy such as foreign trade, payment balances and more.

If an economic phenomenon or issue is under consideration, the economy is divided into positive economics and standard or normative economics.

Positive Economic Economics: Positive economics discusses the link between the reality of economic events by inactivating the causes and also the answer to the question of what has happened in economic events and matters.

·      Will Afghanistan's economic growth slow down? If really it is falling, it will be the truth;

·      But why is Afghanistan's economic growth slowing, what is the reason?

Thus, positive economics generally examines the issues that exist in the economic system.

Normative Economy: The standard economics of answering the question ("What to do, what to do for the better?") Is found in economic events.

The standard economy not only looks at the current situation as a positive economy, but also looks for solutions that, after analyzing existing economic events, lead the policy toward achieving its goals. Example: What are the causes of high inflation in a country and what should be done to reduce them? Can the public help reduce inflation? (If the general public cuts consumption, demand will fall and the general level of prices will decrease as demand falls. This means that inflation will decline).