Economics Is Not Just About Money

There is a general public misconception that the economy is about money and finance. This is simply not true. Although there are certainly elements present in the Study of Monetary Economics, Economic discipline is about the best use of resources of all kinds, whether they be land, labor, capital, time, technology, equipment, natural resources, or whatever. Supply and demand conditions are familiar to us all.

Economics is a logical discipline that attempts to both identify the problem or the current state of affairs, and sometimes even cure them. While discipline is considered as non-exact science for about two centuries, the advent of modern technology and computer models & basic historical information has now been significantly enhance the ability of economists to estimate how many variables can and will affect business, industry, government, and everyday citizens and organizations.

Only a few people who understand that Economics and Economic Studies include labor, time, and the use of far more than money. (Although the basic money and banking is an economic concept, the use of micro-finance is about money, not economics.) If a plant manager or supervisor of the warehouse is to decide how many workers are needed, and what to do, this is Labor Economics.

The decision how much product to produce and what price must be sold to maximize profits is Business Economics. Economics also job creation, such as business investment, government spending, export & import (trade) and consumer consumption. Once again, supply and demand issues. Often what we call "management" really Economy.

In most cases, the economy is efficiency. Idea of Economic Studies is to use their best resources may be used, or optimized. Thus, the boundaries of discipline in some form of engineering; Managerial Economics course not. Economists and managers using the Economy has many tools at their disposal for accuracy. This includes calculus, computers, databases, models, advanced mathematics, theory, graphs, charts, tables, and basic supply and demand functions. This is quite an arsenal!

Next time you hear the word "Economy," remember that it's not just about cash, or finance. Money is a small part of the subject. Think about the allocation of resources. Think efficiency. Then you will think like an economist!