Economics isn’t the most popular of majors, but it’s certainly important to know how it works and how you can use it to your advantage if you plan on going into business or if you simply want to understand how the world around you functions.
To get started on that path, here are 5 things you need to know before you study economics.
5 things you need to know before you study economics
1) The basics of micro and macroeconomics
Microeconomics deals with individual markets while macroeconomics deals with the whole economy.
Microeconomics uses analytical tools such as supply and demand curves, perfect competition, and comparative statics to analyze specific markets.
Macroeconomics looks at aggregate data like GDP, inflation rates, unemployment rates, and interest rates.
It takes a much more top down approach by looking at how these factors affect each other.
The difference between the two is that microeconomics focuses on what happens in a particular market, whereas macroeconomics analyzes larger trends in an entire economy.
An example of a microeconomic concept would be perfect competition, where there are many buyers and sellers for one product.
An example of a macroeconomic concept would be aggregate demand, which can help predict how consumer spending will impact prices and production levels over time.
Studying economics requires a strong math background, so make sure your foundation is strong.
You should also take classes in business or mathematics because they’ll give you valuable skills that will come in handy when applying economic principles to real world situations.
2) The different schools of economic thought
There are a few different schools of economic thought when it comes to the study of economics.
There’s the classical school, which is focused on macroeconomics and looks at topics such as inflation, unemployment, and Gross Domestic Product (GDP).
There’s also the neoclassical school, which focuses on microeconomics and looks at topics such as supply and demand.
The Keynesian school takes more of an emphasis on government intervention in economic affairs in order to stimulate or dampen down the economy.
Finally, there’s the Austrian School that is heavily influenced by Friedrich Hayek and Ludwig von Mises.
It differs from the other schools because it relies on free market theory rather than government intervention.
If any of these sound like they’re up your alley, then get ready for some hardcore coursework!
A bachelor’s degree in economics requires six courses, with many majors requiring even more.
One of the most well-known economists ever was John Maynard Keynes who believed that governments should intervene in the economy if necessary to stimulate growth.
A lot has changed since his time however, with more people believing that free market principles work best for society.
3) The importance of economic data
The importance of economic data is often not understood by the general public because it’s difficult to understand and hard to find.
The best way to get a grasp on how economic data affects your life is to take a course in economics.
Learning about unemployment rates, GDP growth rates, inflation rates, consumer sentiment and many other topics are all a part of learning about economics.
Economics is important because understanding these concepts will help you make informed decisions as they relate to your future career or business venture.
If you’re an entrepreneur, for example, knowing what macroeconomic indicators mean will help you better predict the potential success of a new company.
If you’re working at a company that relies heavily on exports or imports, knowing what to expect from international trade agreements can keep your company profitable and save jobs.
Economic data also provides insight into social conditions like poverty levels and employment trends.
Understanding this information is crucial if we want to achieve long-term prosperity in America.
4) The skills you need to succeed in economics
Be able to read and understand graphs, charts, and other visuals of data.
Be able to apply the principles of mathematics such as algebra and calculus.
Learn how to use a spreadsheet program like Microsoft Excel or Apple Numbers.
Have a good grasp on basic accounting principles such as double-entry bookkeeping, accrual accounting, and cash flow forecasting.
Become proficient in at least one programming language like Python, R, MATLAB, or Java.
As an undergraduate student, you may also want to consider taking additional courses that will broaden your knowledge base like accounting and statistics.
These five skills will give you a strong foundation for succeeding in any course of study within the field of economics!
5) The career options available to economists
There are many different career options for an economist. One option is working in the public sector, such as the government or a non-profit organization.
Another option is working in the private sector, such as a bank.
A third option is teaching at a university or college.
Economists can also be consultants and earn a living by providing expert advice on economic issues to individuals and organizations.
Instead of focusing on one profession, it might make sense to explore multiple avenues.
For example, if you’re interested in policymaking but don’t want to work for the government.
It’s possible that a think tank might suit your needs better than another type of employer.
It’s important to talk with people who have studied economics so they can help you decide which path is right for you!
They’ll likely be able to provide guidance about what will happen once you graduate from school, too.
Talking with other students who are majoring in this field may even allow you to find study partners or research partners that could help guide you during your undergraduate years.