Definition of Economics

• "the totality of production relations corresponding to a given stage of development of society's productive forces, the dominant mode of production in society";
• "the organization, structure, and state of economic life or of any branch of economic activity."

• "an economic system that ensures the satisfaction of the needs of people and society through the creation and use of the necessary goods of life";
• "The science of the economy, the ways of its conduct and management, the relations between people in the process of production and exchange of goods, the laws of the course of economic processes."

Basic Concepts of Economics

Among the basic concepts of economics are "production", "allocation of resources", "consumption", "need", "goods", "capital" and "exchange".

• Manufacturing is when a product is created by hands, technology, or computer intelligence for its further use by a person.
• Resource allocation is when the funds necessary for work are shared among the participants in production.
• Consumption is when a person uses products that have been made during production.
• A need is when people need something specific to sustain life or improve its quality.
• Goods are goods and services that are used to satisfy needs.
• Capital is the amount of accumulated funds, both financial and material, for production.
• Exchange is the movement of a manufactured product from one owner to another.

History of Economics

The word "economy" was first used by the ancient Greek historian Xenophon as the title of his treatise around 430–355 BC. At that time, however, there was no need for economics, because the questions of what, how, and for whom to produce were decided by traditions, customs, or the state.

The market economy, in which the free and independent producer began to rule the roost, began to take shape only a little more than three hundred years ago. At the same time, the first scientists appeared, who undertook to systematize new processes, to understand how to meet the ever-growing needs of the population against the background of limited public resources.

Types of Economics

Experts distinguish four types of economy. Among them:

• The traditional type of economy is present in the least developed countries, such as Bangladesh, Afghanistan and Burundi. Such states, in which the population is often fragmented along ethnic lines, rely on agriculture and, as a rule, spend more than they receive.
• The command economy is welcomed in Cuba, Vietnam, and North Korea. Production is subordinated to the state plan, that is, the authorities prescribe what and in what volumes to produce, for how much to sell, and, accordingly, the profit is also disposed of by the country, society as a whole, and not by individual citizens. This was also the case in the Soviet Union.
• The market economy can be seen, for example, in the United States of America and Germany, where everything is as close as possible to the fact that the state does not interfere in the production that is managed and profited by private companies, farms or individual entrepreneurs.
• A mixed type of economy is observed in China, Russia and France. It implies a combination of private and public ownership. Authorities in countries with this type of economy are most often in charge of industries such as defense and railways.

Economic Growth

The term "economic growth" refers to an increase in the quantity of goods produced and services provided, but only over a long period of time – brief bursts are not taken into account. At the same time, it is believed that the indicators of the country's economy cannot improve separately due to the close connection with the general well-being of the population: the quality and duration of life, the level of medicine, education, and more.

Also, when talking about the economic world elite among countries, it is impossible not to mention such a concept as gross domestic product, or GDP. It includes the market value of all goods produced and services rendered that were consumed by society and not aimed at producing something new. Based on the value of the gross domestic product, experts annually identify the states that are economic leaders.

The world's largest economies in 2023 by GDP are:

1. the United States, $25.46 trillion;
2. China – $17.94 trillion;
3. Japan – $4.17 trillion;
4. Germany – $4.07 trillion;
5. India – $3.4 trillion;
6. Britain – $3.07 trillion;
7. France – $2.78 trillion;
8. Russia, $2.3 trillion;
9. Canada – $2.14 trillion;
10. Italy – $2.01 trillion.

Three Basic Theories of Economics

In modern economics, three theories are of interest: those of the Scottish, German, and English economists Adam Smith, Karl Marx, and John Keynes.

• Adam Smith's (1723–1790) theory of economics is when a start-up TV manufacturer makes as many models and brands as he sees fit, and the next time he focuses on the former demand of customers.
• Karl Marx's (1818–1883) theory of economics – when a manufacturer makes as many television sets as society needs, whose representatives have equal rights to the manufactured products.
• John Keynes's (1883–1946) theory of economics states that when a manufacturer makes a minimum of TV sets, but due to the difficult situation in the country, there is still no demand for them, then the state gets involved and invests as much money as possible in the economy, without even being afraid of a budget deficit.

5 Quotes About Economics

• "Economics is the art of satisfying unlimited needs with limited resources."
  Canadian educator Lawrence Peter
• "Economics is not just the science of the use of limited resources, but the science of the rational use of limited resources."
  American economist Herbert Simon
• "All economics is the science of how people make decisions."
  American economist James Dusenberry
• "The motives of economic behavior are essentially determined by the psychology of the crowd."
  American financier Bernard Baruch
• "The pursuit of profit is the only way people can satisfy the needs of those they don't know."
  Austro-British economist Friedrich Hayek

Summary

Let's sum up. Economics is a dual concept that refers to both economic activity and the science of its laws. The history of the term dates back to 400 BC, but even today society has not yet fully understood the essence of the economy itself.