What are Fundamentals of Economics? Meaning and Definition!
Economics is the study of how these scarce and limit resources are used to make way for unlimited material wants and needs of human being. Broadly, economics is concerned with material things and how people make decisions about these things. Learn Fundamentals of Economics. It studies the subject of having and not having various material things in our life. The field of economics is extensive. It is also ever growing. Economists are willing to examine almost anything that affects the material aspects of human life. Most often, the economists voice concern over unemployment, inflation, interest rates, labor problems, government regulation, energy and international trade. The list of what interests the economists goes on and on and cannot exhaust. Different Types of Risk Faced by Banks Today!
The Fundamentals of Economics
Factors of Income, Economic Policy, Economic Systems, Demand-Supply and the Determination of Price, Macro Economics and Micro Economics, Unemployment and Full Employment, Inflation and Stable Prices, Inflation and the Interest Rate Fiscal and Monetary Policy, The Money Supply. Why are the Need Entrepreneurship for Small Business?
Fundamentals of Economics!
Better Understanding by Example
The word ‘fundamental’ has the meaning of basics. When it comes to economics, it indicates the most basic macroeconomic indexes such as economic growth rate, inflation rate, and unemployment rate. Those most basic indexes compose fundamentals of one country and this so-called ‘fundamentals’ best describe the economic status of a country. To put it simply, it shows how strong one’s economy is; whether it’s weak or strong. It can refer to as stamina of a person. To run fast and long, we have to equip ourselves with strong fitness or we would collapse in no time. That’s what happened to emerging markets now. Once it was forecast that emerging markets are ready to run with strong fundamentals, which turn out to bogus. The reason this happened was that it’s hard to estimate fundamentals accurately. We chose to optimistic, and now we sank in the mire.
Korea’s fundamentals are also yet to determine strong. The positive factors that constitute strong fundamentals of Korean economy are vast foreign exchange reserves amounting to over 300 billion dollars. Trade balance surplus, and soundness of government finance. On the other hand, there are also threatening factors such as high household debt. The high percentage of foreign investment in the domestic stock market. In general, Korea’s fundamentals are evaluating to strong enough but it is not reassuring.
Financial Services Commission Chairman Shin Je-Yoon, made a remark on Korea’s fundamentals. “Considering US quantitative easing tapering, Korea’s economic fundamentals are sound and strong, unlike other emerging markets. But we have to scrutinize its impact and route. In this time of crisis, we should prepare not only to microeconomic threats. Which are easily noticeable but also to macroeconomic threats. Also, we should check four systematic risks: tipping effect in the economy, economic volatility, macroeconomic soundness, and mutual relationship with foreign nations.” He also emphasized that Korea should prepare a system that can pre-examine those threats and joint efforts of the Financial Services Commission. Financial Supervisory Service and Bank of Korea are needed.
