ECONOMICS AS AN

APPLIED SCIENCE
Lesson 1.2
 ECONOMICS

The branch of knowledge concerned with the production,

consumption, and transfer of wealth.

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ECONOMICS

ECONOMIC THEORY ECONOMETRICS

Economic theory helps us
understand the causes and
effects of inflation, interest
rates, exchange rates, supply
and demand, etc.
Econometrics is the statistical
and mathematical analysis of
economic relationships, often
serving as a basis for economic
forecasting.

Analyzing Potential Outcomes 3

HOW TO ANALYZE
AN ECONOMIC
PROBLEM?
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HOW TO ANALYZE AN ECONOMIC
PROBLEM?

By Applying the
ECONOMIC
THEORIES.
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APPLIED ECONOMICS
-is the field of study that deals with applying economic theories in
real-world scenarios.
-aims to implement the theoretical facts and enhance the quality
of business, adopt the best practices in carrying out daily
activities, improve human behavior, etc.
-it helps figure out to what extent the choices made by an
individual or entity would impact a business or individual decision.
-the application of the core theoretical economics and
econometrics to answer a questions in a wide range of fields.
-a tool to help solve a certain real world problems based on the
economic theories.
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EXAMPLE:

Applied economics can help us

understand more about the prices we pay,
as what Law of supply and demand theory
tells us.

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 TO SUMMARIZE IT,

Applying economic theory in our

lives means trying to address
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actual economic issues and be

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able to do something about it.

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JOHN NEVILLE KEYNES

Who is John Neville

Keynes?
• John Neville Keynes was
born on August 31, 1852
• The first man used the
term "applied economics"
Applied economics in relation
to Philippine economic
problems
A solid understanding of economic
principles and how they are applied in real
life situations can serve as significant tool to
help address the country’s economic
problem.
Applied economics solves economic
problems by providing information on how
people, businesses and government behave.
This can enable economic actors can make
better decisions and solve the problems.
For example, understanding the existence
of scarcity can help Economics students
analyze how to maximize the use of
available resources in order to overcome
scarcity.
Having knowledge about economic theories
such as the Law of Supply and Demand can
help in analyzing why prices are high and
what government can do to help bring
down prices.
THE
PHILIPPINES'
BASIC
ECONOMIC
PROBLEMS
The Philippines has grown
significantly. During President
Benigno Aquino's administration. With
a growth rate of the country GROSS
DOMESTUC PRODUCT of 6.8% in 2012,
improving to 7.2% in 2013, slowing
down to 6.1% in 2014, these rates are
an improvement of part rates
Preceding President Aquino's term.
Marvin

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The Philippine economy has grown
significantly during President Benigno
Simeon Aquino's administration. With a
growth rate of the country's Gross
Domestic Product of 6.8% in 2012,
improving to 7.2% in 2013, and slowing
down to 6.19% in 2014, these rates are an
improvement of past rates preceding
President Aquino's term. It is also higher
than its Asian neighbors such as Malaysia,
Thailand, South Korea, Hongkong, India,
and Indonesia
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Despite this admirable growth, people, especially the poor,
have been complaining of non-inclusive growth. Millions of
Filipinos are claiming they experience hunger or they still
live below the poverty level
Unemployment

Only one-fourth of the Filipinos

that enter the labor force are able
to find good jobs in the country,
and the rest of them find jobs
overseas, leave the labor force, or
end up becoming
unemployed/underemployed.
Though jobs are being generated,
there’s a need to generate jobs at a
much faster rate, to be able to
bring down the unemployment 17

rate.
 BOOMING
POPULATION
When population becomes too big,
economic resources may no longer be
enough to support the growing
population. According to the 2010 census,
the Philippine population stood at 92.3
million. As of 2014, it has reached more
than 100 million- growing by 2% from
the previous year and one of the highest
in Asia.

ALPINE SKI HOUSE

Poverty

Another significant socio-

economic problem in the country
is poverty. As reported by the
National Statistics Coordination
Board, in 2006, poverty incidence
of the population registered at
26.4%, 26.5% in 2009, 25.2% in
2012, and 28.8% in the first
semester of 2014.

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