Why is economics important?

The study of economics is about much more than money.

Most college students will be required to take a course in economics before they graduate. For some students, this inspires dread as they question the importance of the subject. The importance of economics is that it provides insight not only into financial matters, but the world at large.

Benefits

Studying economics provides the knowledge to understand individual economic decisions, as well as developments in business, government, and the world economy.

Effects

Economics courses often illustrate class material with examples from current events. This deepens an understanding of events in the news.

Considerations

Government actions have economic effects, positive and negative. A knowledge of economics helps a person become a more knowledgeable participant in the political process.

Misconceptions

Economics is not solely about money. The discipline concerns itself with scarcity and allocation of resources, which have applications beyond monetary concerns.

Expert Insight

Economist David Friedman, in his book Hidden Order: The Economics of Everyday Life, wrote that economics is a powerful tool for understanding how human beings behave.

References

• Principles of Economics (3rd edition); N. Gregory Mankiw; 2003
• Hidden Order: The Economics of Everyday Life; David Friedman; 1996

Resources

• Economicshelp.org: The Importance of Economics