There are four main
divisions of economics. They are Consumption, Production, Exchange and
Distribution. In Modern times, economists add one more division and that is
Public finance.
1.
Consumption
The economic activity by which individuals
try to satisfy their needs and wants are called as consumption. The objectives
of consumption are to satisfy needs and want whereas the consumer seeks
satisfaction or utility.
2.
Production
The process of changing, by adding value,
raw materials into finished goods is called production, in other words,
production is a value adding process to the raw materials in order to make
final products.i.e the process of employing scare resources to satisfy human
needs is known as production.
3.
Exchange
Goods may be exchanged for goods or for
money. If goods are exchanged for goods, we call it barter. Modern economy is a
money economy .As goods are exchanged for money.
4.
Distribution
Wealth is produced by the combination of
Land, Labour, Capital and organization, and it is distributed in the form of
rent, wages, interest and profits.
5.
Public Finance
Public Finance deals with the economics of government .it studies mainly about income and expenditure of government.
Public Finance deals with the economics of government .it studies mainly about income and expenditure of government.
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