There are distinct differences between an economics degree and a finance degree. While they both concern money and the general economy, they both result in different career directions. Finance degrees focus on markets, corporations and individual finances. Economic degrees have a very limited focus of either microeconomics or macroeconomics.
Finance and economics degrees can be divided into major branches. Finance degrees may focus on public, personal, corporate and government finance. Personal finance is management of individual savings, budgets, planning and risks at the family unit level. Corporate finance revolves around capital structure, managerial accounting and shareholder value. Public finance focuses on the role of the government’s revenues and expenditures in the economy. It generally teaches students how to become financial professionals in a government agency.
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Economic degrees either focus on national or domestic microeconomics and macroeconomics. Macroeconomics is the broad study of the overall performance of the national economy. It deals with labor, income, output and economic sector correlations. Microeconomics focuses on how individual businesses and households within an economy allocate, achieve and manage their resources.
These degrees teach students about making, managing and quantifying money. Students learn about the fundamentals of bonds, commodities and investment vehicles. Assignments and discussions may cover interest rates, market evaluations, price trends and risk quantification. Common class topics will be about liability minimization, corporate assets and accounting and business financial statements. After graduation, students will be able to address key issues that finance managers face every day, such as firm valuation and capital budgeting. There will always be classes on professional ethics, regulatory environments and corporate social responsibility. For example, a class on corporate finance may introduce students to long-term investment topics. Students will understand how to make the best capital budgeting and structure decisions. These degrees often focus on applied planning, strategic models and managerial decision-making.
These degrees will teach students how economics are the financial framework that houses certain political, legal and social aspects and systems. Economic degrees help students to better understand, analyze and take action on certain aspects of these interrelationships. Economics is not a precise science because there are so many variables, so students learn how to use factual observation, academic research and empirical exploration to produce reliable data and sound reports. These degrees help students to better understand, analyze and take action on certain aspects of these interrelationships. Students will understand the various theoretical schools of economic thought, which will help them acquire the analytical, interpretive and scientific skills needed to become an expert consultant, decision-maker and thought leader. Classes on microeconomics will look at concepts like market structure, failure and resources. Classes on microeconomics will cover static models, consumer behavior and distributive efficiency.
Choosing between an economics degree and a finance degree is difficult for some students because they appear similar. However, there are differences that lead to very opposite career paths. Anyone who likes helping people and companies manage their money should select a finance degree, while anyone who enjoys analyzing policies and trends should study economics. Readers can explore business and financial occupations here.