ECONOMICS AND ITS IMPORTANT CONCEPTS

Presented by:

Abrazaldo, Arman A.

Esquibal, Ruby Lyn S.

Lalangan, Jhonalyn T.

Maranion, Jam Rayce L.

ECONOMICS: MEANING, NATURE AND IMPORTANCE

MEANING OF ECONOMICS
• Economics is a social science that focuses on the production, distribution,
and consumption of goods and services, and analyzes the choices that
individuals, businesses, governments, and nations make to allocate
resources.
• Economics is a social science that concerned with the study of the proper
allocation and efficient use of scarce resources to produce commodities
for the satisfaction of unlimited needs and wants of man.
NATURE OF ECONOMICS
• Economics as a Science
• Like science, it has a cause and effect relationship
between economic phenomena.
• It has its own methodology of study (induction and deduction).
• It forecasts the future market condition with the help of various statistical
and non-statistical tools.
• Economics as an Art
• Art tells us how to do the thing i.e. to achieve an objective. Economics is
also used for achieving a variety of goals.
• Art is the practical application of theoretical knowledge Like Art,
Economics also practices its theoretical laws.
• Economics as a Social Science
 • Economists develop models, or theories, which are simplified
representations of the real world.
• Models help economists to understand, explain, and predict real-world
economic phenomena.
• Like other social scientists, economists usually do not perform laboratory
experiments. They typically examine what has already occurred in order to
test their theories.
IMPORTANCE OF ECONOMICS
• Economics is considered as the “Queen of the Social Sciences”.
• Knowledge and understanding about economics give an individual and
group of people an edge in decision making.
• Economics places greater emphasis on precise and systematic analysis.
• Economics is important in business.
• Economics helps employees and buyers make better employment and
buying decisions, respectively.
• Having a keen knowledge of economics makes one more efficient in
financial investment decisions both for personal finance or running
business
• Basic understanding of economics is essential for well-informed
citizenship.

THE CONCEPT OF DEVELOPMENT

DEFINITION OF DEVELOPMENT
• Development is widely used to refer to a specified state of advancement
or growth.
• In general, the word development describes good change.
DIFFERENTIATE ECONOMIC DEVELOPMENT AND ECONOMIC GROWTH
What is economic development?
• Programs, policies or activities that seek to improve the economic well-
being and quality of life for community.
• Continuous and long term process
• Increase in productivity
 • Measurement: Human Development Index and Human Poverty Index
What is economic growth?
• Increase in the production of economic goods and services
• Short term or short period
• Increase in production
• Measurement: Real GDP and GNP
MEASURES OF DEVELOPMENT
• GNP (Gross National Product)
• The total market value of all final goods and services produced by a
citizen.
• GNP stands for Gawa Ng Pinoy
• GDP (Gross Domestic Product)
• The total market value of all final goods and services produced by a
country.
• GDP stands for Gawa Dito sa Pinas

ECONOMICS AND DEVELOPMENT STUDIES

ECONOMICS
Economics is a field of knowledge concerned with managing scare resources to
satisfy the unlimited human wants and needs.

DEVELOPMENT STUDIES
• Development Studies takes a look at development throughout the world,
with a focus on developing nations.
• Development Studies aims to tackle some of the challenges facing the
developing world and develop strategies to help alleviate poverty.
• Development Studies is a diverse field of study that takes ‘development’
as its central concern. ‘Development’ is a contested concept, which
encompasses two broad sets of concerns.
Characteristics of Development Studies
 • Development Studies are interdisciplinary.
• Development Studies are contested.
• Development raises questions of power.
• Genuine partnerships are critical for Development Studies.
• Development takes place at different geographic scales.

THE REAL MEANING OF DEVELOPMENT

• The word 'development' is widely used to refer to a specified state of
advancement or growth.
• It could also be used to describe a new and advanced idea or product; or
an event that constitutes a new stage under changing circumstances.
Generally, the term development describes good change.
Other Indicators of Development
• Physical Quality of Life Index (PQLI)
• An attempt to measure the quality of life or well-being of a country. The
value is the average of three statistics: basic literacy rate, infant mortality,
and life expectancy all equally weighted on a 0 to 100 scale.
• Human Development Index (HDI)
• Combines the normalized measures of life expectancy, literacy,
educational attainment, and GDP per capita for countries.
• Capability Poverty Measure (CPM)
• Considers three objectives of development:
• to be nourished and healthy
• to be capable of safe
• healthy reproduction 
• Economic Freedom Index (EFI)
• Uses ten criteria: trade, taxation, government intervention, monetary
policy, foreign investment, banking, wage and price, property rights,
regulation, and black market activities.