What is the relationship between economics and finance?

Answer 1

Economics is the financial element of something like running a business.
Money matters

Answer 2

When we mention finance it helps to distinguish between personal finance and public finance. Personal finance is how individuals make investment choices to gain wealth. It helps to understand economics so you know how economic conditions impact your investments i.e. stocks, bonds, etc. Public finance is about how the government pays for the stuff it provides like: schools, roads, social security benefits, etc. In economics we discuss how to "tax and spend" so that we can have what we want as a nation yet not take away from the productive motives and efforts of our people. We talk about how as a nation our government spends more than it collects thru taxes and then we have to borrow. We talk about how foreign countries will lend us money (buy our bonds) because we are a solid investment, but then do we want the national debt to be owed to China, etc? Even as a business owner or large corporation, it helps to understand the markets for both goods and services and the market for loanable funds to help make solid decisions about production, expansion, what assets to buy, when profits will be strong, etc.

Answer 3

You can take two approaches to this question:
1) Finance is a specialized branch of economics, specifically the economics of financial markets and institutions with special focus on the mathematical descriptions and analysis of market behavior.

2) Finance is a discipline of applied mathematics with a focus on financial engineering, modeling, prediction, forecasting, hypothesis testing and stochastic calculus. Its tie-in with economics is primarily in terms of theory of markets and the pricing of some assets based on qualitative rather than quantitative measures.

Answer 4

Both economics and Finance are related to the managing the wealth of nation or other institution. and finance manager must posses basic knowledge of economics.

Answer 5

Finance is a subfield of Economics. Generally, it deals with investor behavior (a subfield of microeconomics); international capital flows (a subfield of macroeconomics), along with asset valuation.

In undergrad, finance and economics courses tend to be rather different --- they start to converge the higher you go.

Answer 6

Economics and finance are correlated and co-working together for better financial reports both aspects are highly appreciated in economic development.

Answer 7

In a nutshell, Finance is to Economics as Engineering is to Physics.