4 Aspects of Economics

The study of economics has the following four broad aspects.


Aspects of Economics


Study of consumption: This aspect deals with the study of the behavior of consumers in different types of markets. The basic concern here is to understand how a rational consumer makes his preferences to get the maximum possible satisfaction, keeping in mind his fixed level of income, the prices of various goods and services, etc.

Study of production: This aspect deals with the production decisions of producers in different types of markets. It explores how a producer takes various production decisions. It highlights how a producer combines different inputs (given their prices) in order to minimize the cost of production and maximize profits.

Study of distribution: This aspect explores how national income is distributed in a country. In other words, we analyze how the income arising from the total production of an economy is distributed in the form of wage, profit, rent, and interest among the different factor owners (labor, entrepreneur, land, and capital).

Study of basic macroeconomic problems: Economics is the most powerful tool to understand and analyze the root causes of the basic macroeconomic problems (such as poverty, unemployment, and income disparity) faced by an economy. Not only does economics help us understand the interrelationship between these problems, but it also helps us take various corrective measures to counter these problems.


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4 Aspects of Statistics

Statistics is closely related to the four basic aspects of economics namely, consumption, production, distribution, and exchange.

Statistics

Statistics refers to the aggregates or averages that relate to certain inquiries or relationships. The meaning of statistics can be understood in two ways: in the plural sense and in the singular sense.

Scope of Statistics in Economics

Statistical tools and methods have wide applicability across various fields. The following are the Scope of Statistics. Business firms use statistics to study market fluctuations