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Economics is one of the paramount and most sought-after subjects of Social Science. The main objective of studying Economics is to have an overall account of the production, distribution, and consumption of goods and services. In modern societies, the economy plays a constructive role along with a humungous scope & relevance. Moreover, we can say that the nature and scope of Economics generally lie based on the interaction between Economic agents towards economic prosperity and work. In this blog, we will be exploring more about it.
This Blog Includes:
What is Economics?
To put it simply, Economics is a branch of social science that deals with the study of choice and optimum utilisation of resources as well as the production, distribution, and consumption of goods and services in an economy. Microeconomics studies individual choices and consumer behaviour on a micro level. At the same time, Macroeconomics explores how the economy deals with factors like inflation, GDP, and equal distribution of resources, as well as international economies.
What is the Nature of Economics?
Economics as a subject has a triple association with the fields of arts, science, and social science. Many think tanks around the globe are still trying to establish the nature and scope of Economics. Let’s explore how:
Economics as an Art
Economics as an art is the implementation of theories, concepts, and findings to achieve goals. Thus, the practical application of the scientific economic findings comes under Economics as an Art. It includes graphs, figures, tables as well and equations. All the theories in it are well explained with the help of graphical representations. Moreover, all those theories are perfectly explained, defining the relationship between economic variables and the application of theories, etc. Many economists have evolved over the years and presented their divergent views about economics. Some believe that economics can be seen through the prism of Science, and some believe it falls in the category of the arts.
Economics as a Science
Let’s now understand the nature of Economics as a Science. You all know that Science is based on the systematic study of knowledge or facts. For example, to conduct microeconomics and macroeconomics research, we collate data, systematically classify it, and analyze it. Science deals with the relationship between cause and effect. It can further be classified as positive science or normative science. Positive science deals with the relationship between cause and effect by scientifically analysing the problem to come up with a solution. It deals with the ‘What has happened’ concept. On the other hand, the normative science of economics deals with the prediction of the future. ‘What ought to happen’ falls within normative science.
Economics is a social science that looks into how individuals, businesses, and governments make choices when resources are limited. These choices influence how resources are shared throughout society. It combines theoretical models with research methods, including statistical analysis and case studies, to examine patterns of production, consumption, and distribution. It also considers human behavior, organizations, and cultural norms. Economics connects with fields like sociology, political science, and psychology, especially when studying consumer decisions, public policy, and how organizations operate. Its focus on issues like income distribution, poverty, and welfare highlights its important role in shaping social progress and informing policies that seek to raise living standards and lessen inequality.
How to Explain the Scope of Economics?
The word scope can be understood as ‘the extent of the area that something deals with’. Major things that come under the purview of Economics are considered as its nature and scope. When it comes to the scope of Economics, Microeconomics deals with the applications of Economics on an individual level, be it consumer-oriented or household-related. On the other hand, Macroeconomics expands the scope of economics to the extent of a whole economy as well as international economies. Let’s explore these two in further detail:
Microeconomics
The main aim and objective of Microeconomics are to study the individual units. A consumer, a household, a firm, or an industry, is what constitutes an individual unit. So we can say it is one of the foremost scopes of Economics. Concepts like product pricing, firm behaviour as well as factor pricing and consumer behaviour are thoroughly studied in microeconomics. Elasticity, the theory of production, Monopoly, and Oligopoly are some of the main characteristics of this division of Economics.
Macroeconomics
Macroeconomics is another major division of Economics. It solely focuses on overall production. It enables a student to study the entire economic activity rather than individual units. Here you can study the level of output, total savings, overall consumptions, total investments etc. Growth, business cycle, unemployment, inflation and deflation are the main characteristics of macroeconomics.
Public Finance
Public finance looks at how governments gather and spend money to offer goods and services. It studies tax systems, including how different types of taxes like income, sales, and property influence economic behavior and fairness. It also reviews public spending programs, such as social welfare, education, and infrastructure investment. By exploring budget deficits, public debt, and fiscal policy, public finance weighs the trade-offs between efficiency, redistribution, and long-term financial stability.
Financial Economics
Financial economics studies how money, banking systems, and capital markets help allocate resources over time and during uncertain situations. It looks at asset pricing models, how interest rates form, and how financial intermediaries like banks, insurers, and investment funds manage risk and direct savings into useful investments. This area also examines market efficiency, the reasons behind financial crises, and how to create regulations that stabilize the financial system.
International Economics
International economics looks at how goods, services, capital, and labor move between countries and the rules that control these movements. It includes trade theory, such as comparative advantage, tariffs, and quotas, to explore how countries benefit from specialization. It also examines balance-of-payments trends, how exchange rates are set, and how globalization affects local jobs, income distribution, and monetary independence.
Development Economics
Development economics looks into the challenges and policies related to economic growth and structural change in low- and middle-income countries. It studies factors that boost productivity, such as building human capital, adopting technology, and ensuring good institutions. It also focuses on strategies to reduce poverty, including microfinance, conditional cash transfers, and land reform.
Also Read: CBSE Economics Class 11 Syllabus for 2025-26
Career Scope of Economics
A degree in economics opens the door to a wide range of specializations and industries. In India, economics graduates are in high demand for their ability to interpret complex market trends, assess risk, and guide strategic decision‑making. Below are some of the most sought‑after career paths for economics professionals.
| Role | Description |
| Economist | Conduct macro‑ and microeconomic research and develop forecasts |
| Business Economist | Analyze company performance, market conditions, and competitor behavior to inform pricing, investment, and expansion decisions |
| Data Analyst | Extract insights from large datasets using statistical tools and econometric models |
| Actuary | Use probability and financial theory to evaluate risk in insurance, pension plans, etc. |
| Financial Risk Analyst | Identify, quantify, and mitigate financial risks, such as credit, market, or operational risk |
| Cost Accountant | Monitor and control production costs, prepare budgeting and forecasting reports, and recommend cost‑saving measures |
| Economic Researcher | Design and execute studies on economic issues, such as poverty, inequality, or trade |
| Financial Planner | Guide individuals or businesses on investment strategies, retirement planning, and portfolio management |
| Financial Controller | Oversee budgeting, accounting operations, and financial reporting within an organization |
| Statistician | Apply statistical methods to collect, analyze, and interpret data in fields |
| Financial Economist | Study the interplay between financial markets and the broader economy, developing models to understand asset pricing and monetary policy impacts |
| Senior Market Analyst | Evaluate market trends, consumer behavior, and competitive dynamics to advise marketing and sales teams on growth opportunities |
| Quantitative Analyst | Build mathematical models to guide trading strategies, risk management, and algorithmic decision‑making |
Different Viewpoints on Economics
Let’s get to know the various viewpoints that further justify the nature and scope of economics
Classical Economics
Classical economists focused on wealth as the main topic of economic study. Adam Smith, seen as the founder of economics, defined the field in his important work, An Inquiry into the Nature and Causes of the Wealth of Nations. He described economics as the study of how nations create and grow wealth. David Ricardo built on this by stating that economics should look at how wealth is distributed among landowners, capitalists, and laborers. J.-B. Say viewed economics as a science focused on wealth in all its forms. He famously stated that “supply creates its own demand,” highlighting the importance of the production process. John Stuart Mill further clarified the classical approach by defining economics as a practical science that studies both the production and distribution of wealth while considering public welfare. Together, these thinkers created a wealth-centered framework that shaped early economic ideas.
Neo-Classical Economics
Alfred Marshall is notable among neoclassical economists for raising the status of economics within the social sciences. He argued that “wealth was observed as the basis of human welfare” and defined political economy, or economics, as “a study of mankind in the ordinary business of life.” By focusing on human welfare rather than just wealth, Marshall and his neoclassical peers shifted the field’s focus toward understanding how economic activity aids overall human development.
Scarcity Definition
Lionel Robbins, a well-known economist, described economics as “the science which studies human behavior as a relationship between ends and scarce resources which have alternative uses.” By highlighting scarcity—the main economic issue of having limited resources to satisfy unlimited wants—as the key focus of economic study, Robbins expanded the field’s reach to include all choices that individuals and societies make when distributing resources among competing goals.
Growth Oriented
In today’s world, economic development focuses on growth. It includes not only increases in output but also improvements in social well-being and living standards. The goal is to end poverty and unemployment, reduce inequalities, and eliminate malnutrition. As a result, economic development goes beyond just creating wealth. It aims for overall progress in human welfare and quality of life.
Explore: Economics Project for Class 12
FAQs
Ans. The nature of economics refers to its fundamental characteristics as a social science that studies how individuals and societies allocate scarce resources among competing ends, employing both theoretical models and empirical methods to explain production, distribution, and consumption of goods and services.
Ans. Economics covers a wide range of human activities, from public finance and international trade to health economics and environmental policy, examining how choices by households, firms, governments, and non‑profit organizations affect welfare, growth, and the distribution of income.
Ans. Scarcity, the fact that resources (time, labor, capital, natural assets) are limited relative to human wants, underpins every economic decision. It defines the subject matter (nature) of economics and drives its reach (scope), as economists analyze trade‑offs, opportunity costs, and efficient allocations across all sectors.
Additional Reads
Hope this blog has helped you with a comprehensive understanding of the nature and scope of economics. Are you looking forward to applying to any top-notch university for Economics? Let the experts at Leverage Edu take care of your academic journey. Get in touch with us now!
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