Importance of the economy in everyday life

We explain how important economics is in everyday life and what is the difference between macroeconomics and microeconomics.

Importance of the economy in everyday life
The economy is reflected in prices, salaries and even the availability of products.

How important is the economy in everyday life?

Economics is the discipline that studies the complex dynamics of production, distribution and consumption of goods and services by the different companies and the different agents that intervene in said chain.

It is a very vast area of ​​human knowledge, the result of much debate and whose purpose is to find the best way to use the scarce and finite resources available in the world, in order to satisfy with them the greatest possible amount of the infinite human needs.

Often these issues can seem distant to us, especially when they are posed with specialized terminology, using reasoning and concepts that have to do with history, with political-economic systems and with the philosophy of money.

This is because economics, as a social science, it is not an exact discipline and universal postulates, as can be chemistry or physics, but everyone has their own perspective on these issues, although some may be more informed than others.

The economy works on two levels:

  • The macroeconomic, which contemplates the entire system of production, distribution and consumption.
  • The microeconomic, which focuses more on the small scale of family economies. The latter is the one that we can normally witness in our daily lives, because it is the closest to our day-to-day lives, but this is equivalent to seeing the foot of an elephant through a hole and we believe that this is the whole animal.

That means that everyday life is not alien to the economy at all. In fact, the many actions that we carry out on an ordinary day of our lives are economic activities that are part of the production, distribution and consumption circuit at some point.

When we turn on the kitchen to cook our food, or when we buy it in the supermarket, or when we go to work so that other goods and services are produced, we are participating in the gigantic circuit of the local and even international economy.

Let’s think about it like this: for a product to reach the shelf of the store where we buy it, it must be produced somewhere by people who earn a salary, and then transported to our city and distributed in the different stores, where it is sold to us. by other employees, accumulating costs of energy, time and effort, which ultimately determine the price we pay.

In that gigantic chain, we are both consumers (buyers) and workers that we contribute, in our respective jobs, for which we earn a salary.

On the other hand, the way the economy works can be perceived by its flaws or negative consequences. When the prices of products and services rise (inflation), making the money we earn yield less than before, we are perceiving an economic effect that has an impact on our daily lives, as this may imply that we stop consuming certain things, or that we find them a cheaper replacement.