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Chapter-1 on introduction to economics as freshman course
Course: Introduction to Economics (IECO101)
121 Documents
Students shared 121 documents in this course
University: Addis Ababa University
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MODULE - 1
Understanding Economics
1
ECONOMICS
Notes
What is Economics
1
WHAT IS ECONOMICS
Economics as a subject has assumed great importance in the field of social science. In
our day to day life we use a lot of economic concepts such as goods, market, demand,
supply, price, inflation, banking, tax, lending, borrowing, rate of interest etc. Similarly,
we take economic decisions related to the distribution of our income to purchase
various goods, making a budget to do some work, taking up a job to earn, withdrawing
money from bank etc. We also observe and get information on the economic situation
of our society or country foreign country and the world.
OBJECTIVES
After completing this lesson, you will be able to:
know the meaning of economics;
explain the important branches of economics;
distinguish between positive and normative economics;
1.1 MEANING OF ECONOMICS
Economics is a vast subject. So it is not easy to give a precise definition or meaning of
economics as its scope and the area it covers are very large. Ever since, it emerged as
a separate branch of study in social science, various scholars and authors have tried
to give its meaning and objectives. It should be noted that with development of time and
civilization the definition of economics has undergone modification and change. Let us
focus the major ideas involving the meaning of economics below:
(i) Many scholars and authors in the late eighteenth and early nineteenth century
believed that economics is the science of wealth. These scholars are called the
classical thinkers. They viewed that economics deals with the phenomenon of