The Ohio State University

Economics answers questions regarding why new companies start up, the causes of high unemployment and what determines interest rates. But economics is far broader. In addition to studying inequality and exchange rates, economists study underground and illegal markets, why people decide to get married and have children, and the economics of sports. Broadly defined, economics is the study of how individuals, businesses and governments make decisions and how the market mediates those decisions across a wide range of domains. 

Economists develop theories to explain how the components of the economy such as individual people, companies and the government operate and interact with one another. They gather data to estimate the relationships among the various aspects of the economy. Based on these analyses, economists predict how people and companies will respond to changes in policies and external forces. These predictions, in turn, help guide private and public decision makers to form appropriate policies.