Economics is the branch that studies the production and consumption pattern of goods and services. Economics is an area of study that studies and analyses the functioning of the different economic elements in the economy. Economics takes into account both the macro as well as the micro level functioning. These are referred to as macroeconomics and microeconomics respectively. This means that the aspects are looked into from the perspective of the individual, the household, the business and also the economy or the country as a whole. It is essential to understand the individual as well as the combination of factors to have a good grasp of how the economy functions. Economics is based on various principles and theories that have been based on observation as well as scientific evidence. Demand, supply, markets, fiscal and monetary policy are some of the important areas of study under economics. It is a social science.