Introduction to Economics Class 9 Geography Notes Maharashtra State Board
Suppose this is your expenditure this month and your monthly income is ₹ 20000. To strike a balance between your income and your expenditure, decide what will be your preferences for expenditure.
After discussing on the above activity, you will realize that the management of individual or family finances is mainly related to income and expenditure i.e. economic factors. This led to the birth of economics.
The word ‘economics’ comes from the Greek word ‘oikonomia’ which means ‘family management’. There is a lot of similarity between family management and economics. We understand from economics, how to use time, money, labor, and land effectively. How to satisfy the infinite needs of the people using various resources is the study matter of economics. According to Lionel Robbins, ‘Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses.’
As we manage the finances of our family, similarly, villages/cities, states, countries, and the world also need to have economic management. Geographically speaking, the enterprises related to the production, distribution, and consumption of goods and services in a specific region are called an economy. On a global level, there are three types of economies.
Types of Economy
|Capitalistic Economy||Socialistic Economy||Mixed Economy|
|Ownership and management of means of production is in the hands of private individuals.||The means of production belong to the society as a whole i.e. the government’s control.||Co-existence of private and public sectors.|
|The main aim is to earn maximum profit.||The main aim is to achieve social welfare.||A balance between profit and social welfare is made.|
|Germany, Japan, and the USA have adopted such a type of economy.||China and Russia have adopted a Socialistic type of economy.||India, Sweden, and the UK have adopted this type of system.|
Economics is an important social subject. We use economics on a large scale in agriculture, trade, finance, administration, law, and in our daily lives. Economics holds paramount importance in the social development of humans. Adam Smith is known as the father of economics. In his book, ‘Wealth of Nations’, published in 1776, he defined economics as ‘the science of wealth’.
Globalization of the Economy:
The recent economic policies are taking the economy towards globalization. Globalization means building a world economy. A world economy is a borderless economy in which natural resources, profit, services, capital, labor, and technology flow freely across the borders of countries. Globalization means aligning the country’s economy with the world economy. There is free trade and all restrictions on investments are set aside.
The Functions of An Economy:
Every country has a different economy. Nevertheless, the main functions of the economy are similar. Some of the main functions of the economy are as follows:
- Deciding the product and quantity of its production.
- Minimize the production costs as much as possible.
- Distribution of national income according to social and economic justice.
- Making appropriate provisions for the economic needs of the future.
- Deciding for whom the goods will be produced.
- Thus, an economy strives to create a balance between limited resources and unlimited needs.
Comprehensive Maharashtra State Board Class 9 Geography Notes Introduction to Economics can help students make connections between concepts.