Scope of Economics
Economics as a Science and an Art
a) Economics as a Science
b) Economics as an Art
Positive and Normative Economics
a) Positive Science
Positive economics describes “what is.” It explains facts and cause-effect relations without judgment.
b) Normative Science
Normative economics suggests “what ought to be.” It incorporates values and welfare judgments.
Methodology of Economics
- Deductive Method
- Inductive Method
Subject of Economics
a) Conventional Approach
b) Contemporary Approach
Microeconomics
Macroeconomics
Studies the economy as a whole. It looks at national income, employment, inflation, and growth. Often called income theory.
Three Divisions of Economics
- Descriptive Economics
- Economic Theory
- Applied Economics