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Economics · Ch 1 — Economics: An Introduction

Scope and Subject Matter of Economics

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Scope and Subject Matter of Economics

The 'scope' of a subject means the full range of topics it covers. As the GSHSEB Economics curriculum sets it out, the traditional subject matter of economics is usually organised under five interconnected branches, each dealing with one stage of how an economy handles its resources and output.

These five branches do not operate in isolation — a change in production affects distribution, which affects consumption, and government finance touches all three. Beyond these five, the modern scope of economics has widened further to include microeconomics and macroeconomics as a cross-cutting division (Section 2), international economics (trade between nations, exchange rates, balance of payments), and welfare economics (how efficiently and fairly an economy's resources …

Definition 1Consumption

The branch of economics dealing with the use of goods and services to satisfy human wants — what determines how much of a go …

Definition 2Production

The branch of economics dealing with the creation of goods and services by combining the factors of production — land, labour, capit …

Definition 3Exchange

The branch of economics dealing with how goods and services, once produced, are bought and sold — covering markets, pri …

Definition 4Distribution

The branch of economics dealing with how the income generated from production is shared among the factors of production, as rent (land), wages (labour), interest (capital) …

Definition 5Public Finance

The branch of economics dealing with the income and expenditure of the government — taxation, public spending, public borrowing an …