![]() (ii) Since the problems of poverty, unemployment etc. The important ones are: (i) It highlighted an important problem faced by each and every nation of the world, namely creation of wealth. The definition of Economics, as science of wealth, had some merits. In the above definition wealth becomes the main focus of the study of Economics. Some earlier economists defined Economics as follows: An inquiry into the nature and causes of the wealth of the nations by Adam Smith. Science of dynamic growth and development We shall examine each one of these briefly. For the sake of convenience let us classify the various definitions into four groups: 1. 1.2 DEFINITIONS OF ECONOMICS Several definitions of Economics have been given. Man occupies the primary place and wealth only a secondary place. The emphasis has now shifted from wealth to man. Nor can it be expected to be the sole cause of human happiness. We cannot consider the desire to acquire wealth as the inspiring factor behind every human endeavor. Wealth is only a means to the end of human welfare. It deals with wealth as serving the purpose of man. Later economists held that apart from man the said study of wealth has no meaning Economics is concerned not only with the production and use of wealth but also with man. They even called it a dismal science as it was supposed to teach selfishness. Cailyle, Ruskin and other philosophers called it the Gospel of Mammon. The emphasis on wealth was severely criticised by many others. It gave more importance to wealth than to man for whose use wealth is produced. 1ΔΆ This definition was too materialistic. Smith's definition is known as wealth definition. According to him the subject matter of Economics is the study of how wealth is produced and consumed. Smith considered the acquisition of wealth as the main objective of human activity. Adam Smith, the father of modem Economics, in his book entitled 'An Enquiry into the Nature and Causes of the Wealth of Nations (Published in 1776) defined Economics as a study of wealth. The term Political economy means the management of the wealth of the state. 1 UNIT I: BUSINESS ECONOMICS AN INTRODUCTION Lesson: 1 BASICS OF ECONOMICS CONTENTS 1.0 Aims and Objectives 1.1 Introduction 1.2 Definition of Economics 1.3 Nature of Economics 1.4 Let Us Sum Up 1.5 Lesson End Activities 1.6 References 1.0 AIMS AND OBJECTIVES After having studied this unit, you should be able To Understand the fundamentals of Business Economics To Know whether Economics is a Science or an Art To Study the Basic Economic terminologies 1.1 INTRODUCTION Economics was formerly called political economy. ![]()
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