Scope and utility of economics

 

The study of economics has a great importance. Its utility is increasing with time. Durban, a well-known writer, is right to say that economics is the intellectual religion of the day. Today a country is strong enough if its economy is also strong. Economics further furnishes the theories and laws which guide the economy how to be strong. A nation is prosperous if its economy is sound. Economics provides those laws that help her to attain soundness. 

The importance and utility of the study of economics may be well established by focusing on its theoretical and practical advantages in some detail.

 

1.    Theoretical Advantage:

 

The theoretical advantage of the study reflects the light-bearing aspect of economics. Theoretical advantage may be following.

 

It helps in mental growth and development:

 

The study of economics through its laws and principles helps to understand, analyze, and conclude the nature of economic problems a country has to face. This mental exercise broadens our outlook, improves our wisdom, enlightens our minds, sharpens our intellectual thinking, and inculcates in us the habit of rational considering.

 

 It helps in increasing the power of reasoning:

 

Economics is a science of reasoning. Its study helps us in increasing the power of reasoning. It enables us to draw the right conclusion of a problem through a cause-and-effect process. 

 

It helps in attaining perfectness:

 

The man of today can only be a perfect one if he acquires some basic knowledge of economics. The study of economics helps us in assessing the role of the government in achieving important national objectives. Economics teaches us how to make constructive and healthy criticisms of various economic policies. 

 

It helps in awakening civic sense:

 

Economics also helps us in awakening the civic sense. We learn how the developed countries of the world have managed to reach such a high level of economic development. Similarly, our knowledge is enriched by the information we get, relating to the economic problems of our country. It thus makes us understand several economic and social problems like unemployment, poverty, low standard of living low productivity, etc. are there in the country and how they can be solved.

Visualizing the true importance and utility of theoretical aspects of the study of economics, baba Wooten aptly remarks that you cannot in a real sense be a citizen unless you are also to some degree an economist. In the fast-changing world of today, we are now living in a world that is highly dominated by economic forces and economic ideas. Being the citizens of this new world we have to be perfectly aware to perform our due role. 

 

2.            Practical Advantage:

The practical significance of the study reflects the fruit-bearing aspect of economics. Practical advantages are the following.

 

Importance of removing economic backwardness:

 

The most important practical advantage of the study of economics is that it helps remove the main causes of the economic backwardness of a country. Economics has rejected the old concept that a country is poor because it is poor. A poor country can not break through the vicious circle of poverty with the help of ways and means of economic planning devised by economists. Application of economic development theories has proved their worth to help increase low per capita income and rate of low productivity. It is also helpful in solving the critical problems of overpopulation, unemployment, adverse, balance of payments inflation, etc.

 

Importance to statesmen: 

 

The study of economics can help the statesmen in several ways. 

Firstly, it enables them to understand the socio-economic problems that confront the people of their countries and come in the way of their prosperity. 

Secondly, it not only guides the statesmen in tracing the causes of the socio-economic problems but also equips them with remedial measures.

Thirdly, it enables them to know the working process of different economic systems of different countries. 

Fourthly, since economics deals with public finance and addresses its related problems. It also brings to light the impact and implications of taxation and the expenditure made by the government. 

 

Importance to businessmen:

 

The study of economics also has immense value to businessmen. They can learn the procedures and practices followed in trade and commerce. They also get necessary banking, insurance, and import and export information which facilitates their business activities. Economics also deals with such policies explains their impact and implications and adjusts their economic activities.

 

importance to entrepreneur:

 

An entrepreneur's job is to combine the different factors of production in such a way that the maximum output can be obtained. Laws of economics enable entrepreneurs to get the ideal combination. besides the above, the study of economics also helps entrepreneurs in improving the efficiency of different factors of production through its different devised laws. 

 

Importance to a labor leader:

 

One of the important functions of the labor leader is to organize laborers to strengthen their collective bargaining capacity. The study of economics teaches them the art of organizing the labor force. 

Another important function of a labor leader is to improve the efficiency of laborers. The study of economics provides various ways and techniques for improving efficiency.

The study of economics also makes the labor leader realize the impact and implications of labor disturbances in the form of strikes and lockouts, on the economy of the country on the one hand and the welfare of the laborers on the other. Such realization ensures the smooth working of the economy as well as the economic prosperity of the people.  

 

Importance to the consumer:

 

Consumers in their daily lives have to face the problem of meeting their limitless and varied wants with limited income. Here, economics also comes forward to help them. It guides them on how to distribute their limited income in purchasing different goods to get maximum satisfaction out of it. In doing so, economics also helps them in selecting among the most important wants so that they can make a balanced adjustment between their income and expenditure.