Economics

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Applied Economics

Applied Economics is the application of economic theory and analysis to specific problems in real world situations. So, it is the employment of the basic assumptions of economics in our day-to-day lives. It particularly engages in quantitative & objective studies.  The field of Applied Economics thus helps to bring economic theory nearer to the real-world.

Applying economic theories to real world economic situations is critical for the reasons given below:

  • Applying economics theory and analysis in society as a whole is a powerful tool that enables the true and complete picture to emerge, without any manipulated distortions, so that it becomes possible to come up with the exactly required corrective measures.
  • Applying economics theory and analysis to examine the current economic condition will often yield concise and clear ideas on how to maintain aspects that are working efficiently, and strengthen areas where the improvement is required.
  • Applying economics theory and analysis in the real world teach valuable lessons to avoid the recurrence of a damaging situation, or at least minimize the impact. As applied economics is all about the application of theory to real life situations, the process can aid in understanding of the cause of such a negative condition and includes reviewing of the steps taken to rectify or correct similar situations.