Economics is a discipline of social science that studies how people use resources in times of scarcity. The study of economics also involves the subjects of wealth, finance, and banking. All of these areas are studied to gain knowledge of past events and trends. This historical knowledge can then be applied to current events to form predictions for the future.

There are two different main focuses within economics study: microeconomics and macroeconomics. Microeconomics studies people and their choices, such as why they chose to move to a certain neighborhood or how they decided to budget their paycheck. This information helps economic researchers understand such things as why people aren’t able to save for retirement and other similar financial issues that can have an effect on the economy. Macroeconomics studies the bigger picture and larger groups, such as industries, banking systems, business cycles, and governments. This helps researchers understand such things as the causes of recessions or the reasons behind a rise in immigration or a spike in gas prices and how the economy will be affected.

In the early days, economics was part of the discipline of philosophy. Scotsman Adam Smith, who was a philosopher, is considered the “father of modern economics.” In the 1700s, Smith established the first system of political economy, which he detailed in his book The Wealth of Nations. He proposed that rather than measuring a country by its gold and silver, it should be judged by its production and commerce. He was a proponent of free-market economies, in which open markets and consumers decide the prices of goods and services. Smith’s theories formed the foundation for classical economics. In the 1800s, Karl Marx introduced the concept of socialist economics in direct response to the theories of classical economics. Marx expressed the belief that in a capitalistic society, the value of things is grossly inflated and the workers who are responsibl...