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Definition & Scope of Economics

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Definition & Scope of Economics

Adam Smith Definition

The Word Economics drived from the Greeks Word Oikonomos which means to manage the house. So it means the management of the household Especillay in those matter  which Are relating to the income and Expenses of the family. After some times political economy term was also used for this topic can slowly political economy adopted  the shape of Economy.

J.M Keynes

has rightly stated the political Economy is aid ti have  strangled itself with definitions.

J.B

A french  Economist Mr. Walker says “Economics is the science which treats of wealth”.

Prof. Walker

The Americans Economist Mr. Walker says that “Economics is that body of knowledge which relates to the wealth “.

Chapman

Economics treats of all actions of human beings in relations to the wealth.

Prof . ELLEY

Economics is a science  that treat of those social phenomena that are due to wealth getting and wealth using activities of man.

 

Adam smith has Called Economics is the science of wealth in his books. now to analyse this definitions we will discuss the word wealth and it four aspects.

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there are Four aspects of  Wealth

  1. Production of Wealth
  2. Exchange of Wealth
  3. Distribution of Wealth
  4. Consumption of Wealth

1. Production OF Wealth

This Explains how to goods and services are produced by combining the four factors of Productions. For exmple mr. wajhat  wants to proudce sugar  he will combine the four factor of production  First of All he purchase of land then he purchase machinery and raw material. then he employees worker and organizes the business.After combining thes fctors he will produce sugar.

2. Exchange of Wealth

Every producer Exchange his surplus goods and services withe the surplus goods produced by others in a barter economy.this process of wealth exchange continues and it enables every one satisfy his multiple wants.

3. Distribution of Wealth

All goods and services  which are produced in a country during a year are called National Income. Every one individual or class gets his shere from the national income during a one year this is called Distributions of wealth.

4. Consumption of Wealth

When we are use goods and services  to satisfy our wants it is called Consmption.

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