The sole aim of the study is to identify the similarities and differences between Economics and Finance. Economics is believed to be the footing for Finance. It comprises many broader aspects like production, consumption and distribution of goods, inflation, recession, supply and demand. There are studies for government income and expenditure, the impact of business proposals and not the least the favourite index for investors to know the companies and markets. The financial segment is tailored with programmes including prices, interest rates, capital allocation, future cash flows, and much more to the business stake holders.
It is a common scenario that both economics and finance are categorised as separate disciplines. However, it is a fact that Economics offshoot Finance. They lie together in a domain and influence each other to attain stability. Investors do not segregate them because modern economics is no more confined to general education, but towards significant calculations and heavily quantifiable stream in practice. Economics is the powerful resource for analysing the fluctuating markets, tax regulation and policies of government etc to reach perfect conclusions in decision making. In the corporate-sector, Economics are the key to monitor the GDP, deficit and inflation in the market, thereby preventing the lodge of investments into the growing sector.
Finance, on the other hand, outweigh economics and converges on cost, money flows, value and risk management. Finance managers are more proficient with capitals, evaluation of risk and kick around the hurdles of business proposals. Finance finds its abundant applications in reckoning values, judgment of financial tools, estimation of fair value to name a few. Apart from that applied finance has a lot of stock-pricing models and bonds which give outstanding results when compared to the theoretical explanations of Economics.
In a nutshell, both have specific roles to play in today’s unpredictable market scenes whilst the drawbacks they converge to a certain extend and cannot be separated as two.
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