[Author’s Name]
[Institution’s Name]
Essay On The Importance of Economics
The subject of economics has had a lot of bad press in the recent past. The word is that if you laid all the economists in the world end to end, you might just get an accurate predication: but don’t bet on it as they are all likely to have a different opinion. Diversity in opinion is of course a very positive thing. Much of the criticism of economics is that it has focused on ever more theoretical models and mathematical equations.
Economics is vitally important because it is usually proportional to a country’s world power. This world power allows a country to carry much weight in the world arena. An example would be the economic rise of the United States, as it has grown economically it has also gained diplomatic significance. The United States’ ability to finance wars, provide foreign aid, and influence other economies has given it much power internationally, as evidenced by a seat on the permanent Security Council among other things.
Economics seeks to understand how those individuals interact within the social structure to address key questions about the production and exchange of goods and services. First, how are individual needs and desires communicated such that the correct mix of goods and services become available? Second, how does a society provide the incentives for these individuals to participate in the production these goods? Third, how is production organized such that maximum-possible quantities are made available given existing resources and production technology? Finally, given that these individuals are at one time involved in the production process and at other times seeking to acquire the goods that have been produced, how are trading rules and exchange agreements established?.....
