Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek (oikonomia, “management of a household, administration”) from (oikos, “house”) + (nomos, “custom” or “law”), hence “rules of the house(hold)”. Political economy was the earlier term for the subject, but influential proponents in the latter 19th century suggested ‘economics’ as a shorter term for ‘economic science’ that also avoided a narrow political-interest connotation and as similar in form to ‘mathematics’, ‘ethics’, and so forth.
Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business, finance and government, but also in crime, education, the family, health, law, politics, religion, social institutions, war, and science. At the turn of the 21st century, the expanding domain of economics in the social sciences has been described as economic imperialism.
Common distinctions are drawn between various dimensions of economics. The primary textbook distinction is between microeconomics, which examines the behavior of basic elements in the economy, including individual markets and agents (such as consumers and firms, buyers and sellers), and macroeconomics, which addresses issues affecting an entire economy, including unemployment, inflation, economic growth, and monetary and fiscal policy. Other distinctions include: between positive economics (describing “what is”) and normative economics (advocating “what ought to be”); between economic theory and applied economics; between mainstream economics (more “orthodox” dealing with the “rationality-individualism-equilibrium nexus”) and heterodox economics (more “radical” dealing with the “institutions-history-social structure nexus”); and between rational and behavioral economics.