What is Economics? 😴
Economics is the subject that studies the optimization of available resources (people, money, food, etc.) and the economy (the system that countries or regions adopt to trade such resources).
Some people say that Economics as a discipline started with the so-called "father of Economics" Adam Smith in the 1700s. However, the ancient Greek already had the word οἰκονομία, or oikonomíā, which literally means "management of the house", somewhat linked to budgeting. Well, Adam Smith thought a bit further than house management when he wrote "The Wealth of Nations".
Although often thought of as an exact science, Economics is actually an applied social science. The Merriam-Webster dictionary defines an exact science as one whose laws are capable of accurate quantitative expression, while social science is one that deals with the institutions and functioning of human society and with the interpersonal relationships of individuals as members of society.
1+1 equals 2, but 1 person + 1 person might generate a business, a life partnership, a war, and whatnot - this is why studying the interaction between two or more people cannot be considered exact, the results vary. During the Economics course, one most likely will hear the term "Homo economicus", the hypothetical person who only makes rational decisions and doesn't only act out of self-interest, which we all know it's not something real.
If Economics was an exact science and the Homo economicus was real, couples wouldn't argue about one side's uncontrollable expenses, company CEOs wouldn't be arrested for stealing, country presidents would only choose what's best for their people, and a lot of normal people would become rich by simply choosing the best stocks (yes, some people do get rich with stocks - not everyone though, and there are many factors influencing the outcome, such as governmental policies and company long term decisions, which are planned by equally non-Homo economicus people).
As you may have noticed, Economics is more connected to Psychology, Sociology, and similar sciences than it is to math, and knowing this is very important. The old "don't put all your eggs in one basket" applies here. You may invest all your money in just one company. Then someone finds out this company tests its products on animals and starts a massive online boycott. Stock prices fall, and you go crazy and sell them, losing some of the money you initially had. Now, you get scared of stocks and put all your money in a savings account of a single bank. A week later, an audit discovers illegal transactions and the bank declares bankruptcy. You probably won't lose all your money due to regulations for deposit insurance, but it might take a while until you see that money again. Desperate, you get a loan to pay your bills. Unlike you, the institution that lent you the money is lending money to thousands of others, they do not rely on a single source of income.
People are unpredictable, and institutions (companies, banks, governmental agencies, etc.) are full of people. We like to think that huge corporations will only make smart, predictable decisions and continue growing, but Elon Musk firing Twitter employees by tweet is an example of how unpredictable companies are.
Learn more:
Adam Smith - The Wealth of Nations - buy on Amazon.de, Amazon.com
― What is economics?
Economics studies how people interact with each other, make choices (sometimes good, and more often bad), and how these choices affect others.
Companies and governments are made of people, so their choices are frequently bad as well, affecting people negatively.
1+1 equals 2, but it's impossible to predict the outcome of putting 2 or more people together. Economics is far from being an exact science because of that.