What is tax? Finance vs. Economics Degree

What is tax?

Finance is a field that studies how businesses and individuals receive and manage their money. This includes how people use money, such as credit, investments, and assets. There are three main areas of finance:

Public Finance: Public finance is the study of taxation through government agencies. It covers how governments spend, invest and receive money, including taxes and deficits.

Corporate Finance: The corporate finance is the field that examines how companies use and manage their money. This includes shareholder relations, capital structure, and financing.

Personal Finance: The personal finance is the area that covers the financial structure of an individual or family. It examines how people save, spend, earn and invest their money throughout their lives.

What is economics?

Economics is a social science branch covering the movement and trade of goods and services. It includes how people and organizations produce, deliver, and consume these goods. There are two main branches of economics:

Macroeconomics: Macroeconomics is the branch of economics that covers the overall behavior of the economy. This includes how the various ways that global factors such as inflation and gross domestic product affect the economy.

Microeconomics: Microeconomics focuses more on individual consumer or corporate choices and how these can affect the economy.

Finance vs. Economics Degree

There are several key differences between a finance and economics degree:

Coursework

As both degrees share much of the same core subject matter, you may take some of the same courses. This may include public finance, microeconomics, and an introduction to business course. As your program progresses, you take more specialized courses in each department. Here are some finance courses you can expect:

  • Financial Modelling: The Financial Modeling course teaches you how to create an economic model using data from various financial documents such as income statements. You can expect to learn how to record historical data and make predictions based on trends.
  • Financial Statement Analysis: In the Financial Statement Analysis course, you learn how to interpret financial documents such as income statements and balance sheets. Combining this with credit analysis, quality of earnings analysis, and cash flow analysis, you will learn how and when to make financial proposals.
  • Investments: In an investment course, you learn about common principles that help people make investment decisions, such as risk analysis and portfolio optimization. You can learn how to analyze risk versus return, regression analysis, and market valuation.
  • International Finance: The course covers critical topics such as exchange rates, foreign exchange risk, and hedging. Typically focused on corporate finance, you learn how organizations operate globally to maximize their revenue and profits.

With an economics degree, you might expect to take courses such as:

  • Behavioral Economics: Behavioral economics explores the social, psychological, and moral reasons people make decisions in certain economies. You learn about modeling and research and how they can help predict future economic behavior.
  • Environmental Economics: This course provides the overview of how the environment and natural resources affect the economy. You may learn about environmental regulation, economic value, and scarcity while discussing problems and solutions in this area.
  • Economics and Law: The Economics and Law class discuss how criminal law, property laws, and contracts affect the economy. You can expect to learn about the history of law and economic models and analyze their effectiveness.
  • Advanced Economics: Advanced Economics is a class that uses statistics and data to learn about fixed and variable economic models. You can expect to learn how to apply these data interpretations in practical situations.

Occupations

There are some similarities between careers in economics and finance. For example, with each, you may work in a consultant role for organizations. The difference is the data you can analyze and the data you specify to help customers with their needs. Some careers in finance include:

  • Financial Analyst: Financial analysts hire companies to analyze data and make investments and other financial recommendations.
  • Financial Advisor: Financial advisors usually work with individuals to assess their current financial situation and advise on how they can best manage or increase their wealth.
  • Fund Manager: A fund manager oversees investments such as mutual funds, stocks, real estate, and assets on behalf of a company or individual.

With a degree in the economics, you can work in these careers:

  • Economist: An economist studies and analyzes how society produces, distributes, and consumer goods. Economists can work for companies or research institutions as they collect and analyze economic data.
  • Investment Banker: Investment bankers work with individuals and companies to help them raise money in specific markets. They often analyze market trends and opportunities, such as mergers, to increase customer value.
  • Market Research Analyst: Market research analysts work with companies to analyze market trends and performance and recommend new market strategies. They may apply economic principles when gathering information about demographics, preferences, and habits to improve business performance.

Specializations

There are specific specializations you can take in each field. For example, as an economics major, you can choose to specialize in:

  • Agricultural Economics: Agricultural economics focuses on producing, distributing, and consuming agricultural resources and goods.
  • Urban Economics: Urban economics focuses on economic activities that affect cities, such as crime, public transportation, housing, and government funding.
  • Managerial Economics: Managerial accounting is a discipline that applies economic principles to organizational management to help improve decision-making.

Along with finance, many programs offer different specializations, including:

  • Financial Regulation: Financial regulation is the oversight of companies and individuals to ensure compliance with laws and regulations.
  • Capital markets: Capital markets are a specialty that explores relationships between lenders such as banks and those seeking capital such as organizations or investors.
  • Financial Modeling: A financial modeling specialization helps you develop your skills related to creating historical and predictive models to show how financial decisions can affect future investments.

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