Economics is the study of the distribution of scarce resources to satisfy unlimited wants. It deals with the allocation of various resources to different economic units and the relationship between these units. Economics is highly practical in our daily lives as the economy goes through the different stages of growth. This paper explicates the practicality of economics in the modern world.
Individuals all over the world are always involved in the consumption of goods. Economics concerns itself with consumers and their respective behaviors. According to Datta & Economist (2011), consumers all over the world are involved in the purchase of goods with a view to satisfying their needs. The needs are recurrent, hence, making them to buy more products. In addition, economics is applicable in the manner consumers change their consumption patterns in response to various factors, such as prices. They make enormous purchases when prices fall and lesser purchases when prices rise.
Economics is applied in the implementation of monetary and fiscal policies in order to counter the increasing rate of inflation. Mäki (2002) asserts that most economies all over the globe have been exposed to threats of inflation. Inflation leads to the increase in prices of most products, making it hard for individuals to make purchases. Datta & Economist (2011) observes that the hardest-hit individuals in such economies have been low income earners, who are not able to cater for to continue consuming at the same level. Thus, governments have relentlessly applied economics in the solution of economic problems such as inflation through monetary and fiscal policies, hence, bringing the economy back to normal.
The allocation of various resources to different economic units is yet another practicality of economics in the current world. Mankiw (2011) reports that governments and individuals are continuously allocating resources to the most efficient units in order to ensure that efficiency is adopted. For instance, economics is put into consideration during budgetary allocations to various ministries in the government with a view to developing the entire country.
In conclusion, economics is highly applicable nowadays. The global changes in economic systems necessitate the practicality of economics in order to address all the issues of concern.