How Applied Economic Sciences Work: Here's The Explanation

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YOGYAKARTA - In economic science, it is known that there are various economic terms, one of which is applied economy. What is applied economy? The following is an explanation regarding what and how economic science works applied.

Understanding The Applied Economy

The applied economy is a conclusion drawn from economic theory and theoretical applications to the situation in the real world. The purpose of implementing this theory is to improve the quality of application of economic theory in the aspects of business, public policy, and daily life. Therefore, it must be carefully considered about budget, benefits, incentives, and human attitudes at this time.

Reporting from several sources, the method of working on applied economic science is by practicing conclusions drawn from economic theory and empirical studies into the real world.

The applied economy can link case studies, where experts can apply existing data in the real world to statistical models. Then the results obtained can be compared to the theory tested. The theory tested can vary greatly.

For example, financial economic science, health economy, public economy, demographic economy, business economy, agricultural economy, and many more.

Applied economic science reduces various abstract concepts to simple ones, which will then be discussed and linked to the business community widely. Economic theories taught in schools or universities are usually the result of an applied economy that has been tried by economists.

Every moment in life, of course, there are problems experienced by humans, including economic problems. The scale can be individuals, nationally, to globally. The applied economic science is trying to try to overcome these various economic problems.

From this implementation, economists can confirm whether the theory of economic science is still relevant to the latest situation or not. If not, then other economic sciences can be sought to overcome the same problems.

The Purpose Of Applied Economic Sciences

Studying how the economy works is applied is not without reason, here are some of the goals of applied economic science in everyday life.

1. More Mastering the World of the Economy

Economic science can talk about market phenomena that occur in society. Why can there be an economic recession? Why is inflation and deflation happening? Why do consumers prefer to buy one product over another? By pursuing applied economic science, you can understand the above concepts better.

2. Recognizing the Relevance of Existing Economic Theory

The applied economy is located at the center of everything you live. Therefore, it is important to dissect how economic science works applied in everyday life and then draw conclusions from there.

That way, economists can formulate whether certain economic sciences can still be applied or are no longer relevant. If knowledge is irrelevant, it must be renewed with new knowledge so that it can be used today.

3. Make a better decision

Not only is it useful for economic experts, on a smaller scale, the applied economy is also useful for managers and leaders of a business. They can learn what to do and what to avoid. With applied economic knowledge, they can make much more appropriate decisions.

The same thing can be felt by consumers who shop at stores or markets every day. Consumers can understand why the price of goods can go up and down at certain times.

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