We live in a world of limited resources, and economics helps us decide how to use these limited inputs to satisfy our never-ending list of wants and needs. Economics is a social science that deals with the production, distribution, and consumption of goods and services. Economics focuses heavily on the four factors of production, which are land, labor, capital, and enterprise. Economics is split into the following two broad categories of study:
Macroeconomics - the branch of economics that studies the overall working of a national economy. It is more focused on the big picture and analyzing things such as growth, inflation, interest rates, unemployment, and taxes. When you hear the Federal Reserve is raising interest rates or that the national unemployment rate is 7.5%, you are hearing about macroeconomic topics.
Microeconomics - the branch of economics that studies how households and businesses reach decisions about purchasing, savings, setting prices, competition in business, etc.
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