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Finance: Importance of economics and accounting

Relate the importance of economics and accounting to finance.

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Economics studies the micro and macro elements (prices, demand, taxes and so forth) in the economies and studies how them impact each other and choices made by participants in the economy. These forces are used in finance as ingredients in forecasts. So, finance uses these elements as ingredients or variables in the forecast model. Higher prices would improve the forecast but lower demand would decrease the forecast. Since prices interact with demand, these two ...

Solution Summary

Your tutorial is 296 words and explains how these two areas are critical to financial expertise and why.