Definition of 'Finance'
The science that describes the management, creation and study of money,
banking, credit, investments, assets and liabilities. Finance consists of
financial systems, which include the public, private and government spaces, and
the study of finance and financial instruments, which can relate to countless
assets and liabilities. Some prefer to divide finance into three distinct
categories: public finance, corporate
finance and personal finance. All three of which would contain many
sub-categories.
The study of finance can also take many forms, depending
on the field or area of finance which one wishes to study. For instance,
economics is considered a pillar of financial science, where both macro and
microeconomic factors affect virtually levels of financial decisions and
outcomes at all levels.
Macroeconomics
The field of economics that studies the behavior of the
aggregate economy.Macroeconomics examines economy-wide phenomena such as
changes in
- Unemployment
- National income
- Rate of growth
- Gross domestic product
- Inflation and price levels.
I’ll talk about the above mentioned factors in detail and
how are they inter-related and what role does central bank plays in controlling
these factors in my next post.