IMPORTANCE OF ECONOMICS IN BUSINESS EDUCATION

Why most colleges and universities require students to complete at least one course in economics?  Because economics touches most areas of life, making it an important as a subject matter to study.

First, let us discuss what economics is. Economics is the study how individuals and societies choose to use scarce resources that nature and previous generation have provided. It is also said that economics is the study of human behavior. Economics is about how an individual make a choice with limited resources to satisfy its needs.

Why do we need to study economics? There are four reasons to study economics: 

1. to learn a way of thinking
2. to understand society
3. to understand global affairs
4. to be an informed citizen.

How do the four related? To learn a way of thinking, one must learn the three fundamental concepts which are Opportunity Cost, Marginalism and Efficient Market. One must learn the concept of making the good choice to be able to understand the society. The past economic status affects the current status of our economy and influence the future status. By learning the stability of our own society, we are now ready to understand global affairs which include international events and economic consequences. By understanding the first three concepts, we can now attain the level of an informed citizen.

How is it related to BUSINESS education?

Economics and Business is like a pair of lovebirds. If one of them dies, the other one will eventually die, too. It’s like if there is no economy, how will the business operate or in the other hand, what is the sense of economy if there is no business. How will the business operate if we don’t know the demand and the needs of the public?

Economics plays a very important role in Business Education. We can’t make a reasonable decision to ensure the stability and the continuous operation of our business in the future. By studying economics, we will learn to make economic decisions to influence the investors and creditors of a business. On the other hand, the main purpose of business education, such as accounting, is to provide information that is intended to be useful in making economic decisions. So, I can say that business depends on economy and economy depends on business. The business needs the economy to know what the necessities of the users are. Also to know what are the products demanded by the public and how many supplies of these products to produce. If there is no business, then there will be no economics. Since economics is the study of making decisions with limited resources, how will you make decisions if you don’t have any resources? It’s like solving a puzzle without the puzzle pieces. We won’t be able to know if the supply produce is enough to satisfy the demand of the public and we won’t be able to tell what the needs of the users are.

These two are both important and cannot be parted from each other.

IMPORTANCE:

• ·         It prepares you to be a more knowledgeable and informed participant in the modern economy.
• ·         It gives our students the building blocks for a successful financial future. It empowers consumers by giving them the knowledge and tools to improve their economic well being. It is the best investment we can make.
• ·     It teaches students the value of money. Economics help us in making decisions relevant in our daily life as a student.
• ·         It can make you a smarter consumer, worker and investor.
• ·         It helps in framing a business, policy and making effective decision related in business education.
• ·         It also solves operational and management problem.
• ·         Its helps in improving the efficiency of workers through different incentives such as increasing wage rates, improving working conditions and providing other facilities.
• ·         It helps us to improve our way of thinking especially the students taking up a business course about making real and personal decisions that they can apply in their future work.
• ·         Helps young people understand the workings of the economy and the financial system in which they are just beginning to participate.
• ·         By the study of economics businessmen learn the procedures and practices followed in trade and commerce. They get information about banking, monetary policy of government which helps them to organize and adjust their business activities and increase the margin of profit and improve the quality of his goods and services.
• ·         It enables us to understand the working process of the economic system and analyzing its issues. Its study guides them to make such economic policies through which distribution of national wealth can be distributed equally among all the members of the society.
• ·         It helps us in determining the economic standard of the country which will help you on deciding if you will risk on putting up a business.
• ·         Even if you are just a consumer it is necessary to know about economics because you will know if your money is worth it in buying those products.
• ·         It is also applicable for those who are just starting to build up their own business if their future business will be marketable on the industry.
• ·         To know how to formulate an understanding of the effects of financial actions.
• ·         To help our society to decide on how to use our limited resources.
• ·         To be aware and understand of the things that is happening in our society.
• ·         Help us in making decisions relevant in our daily life.
• ·         It allows us to be an informed citizen, so that we can determine if the policy of the government is good or bad.
• ·         It helps students/people develop the skills to meet their financial and personal objectives, including savings, financial stability, home ownership, higher education, or retirement.
• ·         It gives people the tools to understand economic and financial issues and to interpret events that will affect their financial futures.
• ·         Informed, well-educated consumers make better decisions, increasing their economic security and well being. These consumers are better able to contribute to vital, thriving communities, further fostering economic development. Improved economic education will result in more productive, fulfilling lives for individuals and families — and, in turn, more vibrant, economically stable neighborhoods and communities.
• ·         Most important, economic education is critical to building bridges between educators, businesses, and consumers. These bridges will prepare our society to meet the challenges of an increasingly knowledge-based economy. As we work to increase familiarity with new technological and financial tools, we give people the resources necessary to secure individual economic success.

Basically on our point of view, the importance of economic on business education is, it will serve as your guiding way or simply this will help you on your DECISION MAKING.