The study of Economics provides students with analytical tools for interpreting economic events and making personal economic choices, even under changed conditions. Economics is the study of how the goods and services we want get produced, and how they are distributed among us. This part we call economic analysis. Economics is also the study of how we can make the system of production and distribution work better. This part we call economic policy.
Economic analysis is the necessary foundation for sound economic policy.
This definition emphasizes two central points. Indeed, most major economic problems arise from this fact of scarcity, and the need to make effective use of our resources to satisfy our wants. If there were plenty of everything for everyone to have without working or paying for it, there would be no economic problem. But, alas, this is not the state of the world, even in the affluent American society, and certainly not in the poorer nations that contain most of the world's people. A description of the level of understanding of these concepts that can be expected of students at various points along the K-12 curriculum, and suggested teaching materials, are available from the National Council on Economic Education as described at the beginning of this document.