Economics is the social science that is concerned with employing society's resources in such a way as to achieve the maximum

level of satisfaction of societal needs and wants. Five major divisions in the discipline provide a conceptual framework for studying economic processes and institutions

The five major divisions of economics are consumption, distribution, exchange, production and public finance.

Consumption is the branch of economics that is concerned with spending by households and firms on goods and services. Consumer spending is significant; it makes up two-thirds of the U.S. gross domestic product.

Distribution examines the allocation of the national income among various inputs, or factors of production. Distribution also can refer to the distribution of income among individuals and households.

Exchange refers to the buying and selling of goods and services, either through barter or the medium of money. In most economies, exchange occurs in a market, the medium that brings together consumers and producers.

Production involves combining inputs or factors, such as land, labor and capital, to produce goods and services. Economists use a production function to study the relationship between inputs and the goods and services produced.

Public Finance
Governments are active participants in the economy. Public finance is the division of economics that studies taxation and expenditure by governments and the economic effects.
Division of Economics

1. Microeconomics — deals with the economic behavior of individual units such as the consumers, firms and the owners of the factors of production. Such specific economic units constitute a very small segment of the whole economy. Their activities are presented and discussed in details. 2. Macroeconomics — deals with the economic behavior of the whole economy or its aggregates such as government, business and household. An aggregate is composed of individual units. The operations of the various aggregates and their interrelationships are analyzed to provide a profile of the economy as a whole. Macroeconomics is concerned with the discussion of topics like gross national product, level of employment, national income, general level of prices, total expenditures, etc.

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