We explain the importance of the economy in everyday life and the difference between macroeconomics and microeconomics. Please read other MTV articles for more information. If you share it, it will be of little help to us.
How important is the economy in everyday life?
Economics is the discipline that studies the complex dynamics of production, distribution, and consumption of goods and services by different societies and the different agents involved in this chain.
It is a vast area of human knowledge, the result of much debate, and its purpose is to find the best way to use the scarce and finite resources available in the world to satisfy as many of the infinite human needs as possible.
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These issues can often seem remote to us, especially when presented in specialized terminology, using reasoning and concepts related to history, political-economic systems, and the philosophy of money.
This is because economics, as a social science, is not an exact discipline with universal postulates, like chemistry or physics. Rather, each person has their own perspective on these matters, although some may be more informed than others.
Economics operates on two levels:
- The macroeconomic level, which considers the entire system of production, distribution, and consumption.
- The microeconomic level, which focuses more on the small scale of household economies. The latter is the level we can usually witness in our daily lives because it is the closest to our everyday lives. However, it is equivalent to seeing an elephant’s foot through a hole and believing that is the entire animal.
This means that everyday life is not at all unrelated to economics. In fact, the many actions we carry out in an ordinary day in our lives are economic activities that are part, at some point, of the production, distribution, and consumption circuit.
When we turn on the stove to cook our food, or when we buy it at the supermarket, or when we go to work to produce other goods and services, we are participating in the gigantic circuit of the local and even international economy.
Think of it this way: for a product to reach the store shelf where we buy it, it must be produced somewhere by people who earn a salary, and then transported to our city and distributed to different stores, where it is sold to us by other employees, accumulating costs of energy, time, and effort, which ultimately determine the price we pay.
In this gigantic chain, we are both consumers (buyers) and workers who contribute, in our respective jobs, for which we earn a salary.
On the other hand, the way the economy works can be perceived through its flaws or negative consequences. When the prices of products and services rise (inflation), causing the money we earn to go further than before, we experience an economic effect that impacts our daily lives. This may mean we stop consuming certain things or look for cheaper replacements.
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References
All the information we offer is supported by authoritative and up-to-date bibliographic sources, ensuring reliable content in line with our editorial principles.
- Economy on Wikipedia.
- Economy in Everyday Life by the Ministry of Education, Culture, and Sports of the Generalitat Valenciana (Spain).
- Economy in Everyday Life by Daniel Schulman in the newspaper La Jornada (Argentina).
- Economy and Everyday Life in Economics 2.0 for high school.
