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Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

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Definition

The study of the allocation of scarce resources within a country and between countries. Economics is a social science because it looks at human behaviour and how people make financial decisions. It is not an exact science, but can offer some worthwhile insights into how markets work. There are four aspects of economics which need to concern the private investor - the business cycle, inflation, interest rates and the balance of payments (BOP). These four areas are inter-related and impact on how share prices perform. The economy generates dozens of economic indicators which are regularly updated and give an idea of where the economy is going. The government is a major part of the economy and the policies which it adopts have a direct bearing on the performance of various shares.

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