Though a simple question, it’s likely that most economics students, especially at the A-Level stage, have little idea how to answer it “correctly”. And we say “correctly” because like most social sciences, there is but a thin line separating right and wrong.

As such, we could offer you multiple definitions. However, a substantially established definition of economics - one accepted by many academics is that economics is the study of how people manage scarce economic resources in their daily routine of living in a society. In other words, economics concerns the decisions we make in the face of scarcity.

Consider two examples. Governments managing their limited annual budget by maximising tax income and minimising capital expenditure is within the study of economics. Yet, a housewife allocating her finite daily household budget on different food items in the market also involves economics. Clearly, the breadth of economics know few boundaries.

So, how does this broad definition of economics tie in with the common (though narrow) perception that economics is just about money - whether the money in your bank account or the money invested in financial assets such as stocks? Well, money is, like gold and food, a resource. One bound by the same rules of scarcity which an economist, or in your case, an A-Level Economics student studies. In the examples we gave earlier, both the limited national budget and the finite household budget we mentioned are represented by a scarcity of money.

Thus, it isn’t surprising that everybody thinks economics is just about money. After all, they are correct, just not as correct as they could be.