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The term “economy” is divided into two meanings:
Economy as an economy – a system of economy that provides society with material and spiritual goods.
Economics as a science – the science that studies the ways in which society’s ever-growing needs are met in the face of limited resources.
In brief, economics is a system that encompasses the production, sale, distribution, and consumption of goods and services.
The main problem of economics is the limited resources available to us and the ever-growing needs of people.
The functions of economic theory are:
- cognitive – discovers new principles and methods in the process of scientific development;
- practical – it develops the existing economic approaches and looks for solutions to important problems;
- prognostic – creates various models of economic development of the state and the world or a separate economic subject;
- world outlook – in the process of studying economics a person learns new aspects of the world around him, the laws of the processes;
- methodological – reflects the ability of science to create new concepts and theories;
- ideological – forms a model of worldview in the process of studying science;
- critical – questions any phenomena to create new theories;
- theoretical – science is constantly evolving to find new directions.
There are two levels of economics:
Macroeconomics studies the behavior of the general economy of the state and the world, as well as market systems;
Microeconomics studies the behavior of individual consumers and businesses.
The basic questions of economics are:
What to produce?
How to produce?
For whom to produce?
