Interpretation of Financial Economics, and its Scope

Definition of Financial Economics, and its Scope

A person in life every day needs money as a change tool in buying and selling transactions. Money which is interpreted can be in the form of currency, demand deposits, or through electronic media. Using the money we have we must know which ones we prioritize and which ones we can postpone. We really need to live with this.

Financial economics is something that we must understand considering that all types of economic activity require money. Whether the scope is small or wide. Financial economics must be applied by a person, either individually or in an industry with a merger nature. Financial Economics

Financial economics is commonly known as monetary economics. An economic activity that is focused on money. Money is a very important thing in the economy. The use of money must be regulated so that there is no waste of money that is not useful. Financial economics is one way to control the use of a person or industry.

Interpretation of Financial Economics, and its Scope

Financial economics or monetary economics is a science that we have often heard of. The implementation of this knowledge can also be observed directly around us. When we are given snack money by our parents, we must consider its use so that it is sufficient to find pocket money for the next period. This is a simple example.

This financial economy must also be applied at the state or government level. The government uses financial economics to make policies that can increase the level of people's prosperity, development and development of the country which are usually included in the APBN and APBD. Financial planning generally refers to financial economics. Financial Economics Interpretation

Financial economics is a person's method of controlling money in and money out either personally or industrially. Money in and out can describe the income and expenses received by the person concerned.

This financial economy also supports in carrying out financial management. A person who carries out good financial management is the same as doing all the things that must be tried in financial economics.

When a person can practice financial economics well until the managerial run is also good. All types of predictions that are tried also have predictions that fit. The prediction can be carried out according to the existing expertise. People who do it have the hope that everything that is desired can be achieved according to the predictions that have been tried. Financial Economics Interpretation For Experts

There is also for experts, the definition of financial economy, among others;

  • KBBI (Big Indonesian Dictionary)

Financial economics consists of 2 words, namely economics and finance. Economics has the meaning of activities that use money, energy, time and others to meet needs. Finance is everything related to money. We can conclude that financial economy is the use of energy, time, and so on in terms of money and activities related to the condition of money.

The Scope of Financial Economics

The scope of the study topics in financial economics, among others;

  • The role and use of money in the economy

We need to master the position and use of money so that we can use it well. The role of money that we can observe directly or what we usually call the original use of money is as a tool of change. As we all know that money also has various derivative uses depending on who holds the money.

For people who have a business, money can be used as a unit of measurement for the wealth they have. The use of money is also related to a person's motives in holding money. A person who holds money has different goals.

  • The monetary system and its effect on the amount of money spread and credit

Financial economy governed by existing policies. The policy that is commonly used is monetary policy. Monetary policy is one of the government's methods of implementing policies that can be applied in the lives of citizens.

This policy was tried by the government so that the economic atmosphere was always in place. When we study monetary economics then we want to know how to apply the spread amount of money. The amount of money that is spread affects the credit issued by the government.

  • The structure and use of the central bank

Financial economics also focuses on financial institutions in Indonesia. These financial institutions consist of the central bank, private banks, universal financial institutions, and others. The central bank is the main part that controls the running of the economy.

The central bank is one of the financial institutions that can carry out all the things that have been authorized by the government. The provisions contained in the central bank will be channeled to other banks.

  • The effect of the amount of scattered money and credit on economic activity

The government will take into account the amount of money scattered in the residents' area. This calculation will be one way to determine the amount of credit, interest rates, and others related to all things tried at the bank. The government can determine selective credit or easy credit depending on market conditions.

  • Payments and the international monetary system

Financial economics is related to international monetary, namely how the government makes policies for international economic actors such as multinational companies. Financial economics serves to calculate the effects of economic activity, exchange rates, and others related to finance. Financial Economics Research Object

Instead, make the object of research to be studied in financial theory. Among others;

  • Financial rights and obligations

Financial economics is concerned with matters relating to the rights and obligations associated with all types of financial transactions. These rights and obligations have various scopes, ranging from people, industries, regions, governments, especially outside parties who are directly related to the government or citizens.

  • Fiscal and monetary policy

Policies that can be implemented by the government in tackling economic cases related to finance.

These 2 policies are paths that can be taken in a balanced way that can coincide. Policies that balance each other will get the best solution. The solution can be carried out evenly in a country.

  • Financial management

Expertise in managing a certain amount of finance. One can carry out planning, organizing, allocating, and implementing according to the predictions they have. Money management skills are something that is very important so that a person does not feel surprised when he loses his money. One can identify with certainty where the money is headed. Financial Economic Benefits

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