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Importance Of Mathematics In Economics Essay

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Economics is the study of how the economy functions and how the economy would function differently with government policies. “Economics is a social science, what makes it different is its use of mathematics and statistics to prove theories and concepts while still incorporating other subjects, such as politics, philosophy, and geography” (Maths Help for Econnomics Students). In order words, what is economics.com explains Economics as “how people interact within markets to get what they want or accomplish certain goals. Since economics is a driving force of human interaction, studying it often reveals a lot like why people and governments behave in particular ways” (what is economics). Economists frequently use numerical approaches when reviewing specific information in an economy. Economists use mathematics to make sure their personal judgments, inferences or theories. The bulk of Mathematics dates back to 3000BC from Babylonians and Egyptians. Over the years, it has extended into numerous branches of everyday human activities. Mathematics was derived from a Greek word “máthēma” meaning knowledge, …show more content…

Mathematics is most common in the two sub-branches of economics; macroeconomics and microeconomics. Macroeconomics is the behavioral study of the aggregate economy. On the other hand, microeconomics is the behavioral study of how individuals/firms make decisions related to price, income etc. The analysis in micro and macroeconomics is done with the use of mathematical models through demand and supply. Macroeconomics discusses factors faced by every economy like unemployment, inflation, prices of goods and services. All these factors faced in macroeconomics require statistical data to draw conclusions. For example, the rate of unemployment in a country is calculated to a percentage with the use of a formula with variables. Mathematics is needed in economic analysis to back up

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