The main functions of economic theory were formed during the formation of this science. There are only five of them.
1. Cognitive. The implementation of this function of economic theory occurs through the study of the essence of processes and phenomena in this area. When science opens and formulates new categories and laws, thereby it replenishes human knowledge, increases the intellectual potential of the whole society. It also helps to expand the worldview of people, scientific forecasting of the economic development of society.
2. Methodological. The meaning of this function of economic theory is that it reveals the fundamental concepts, categories, laws and principles of management. And they all have practical application in many branches of human activity. That is, a number of other sciences in this field are based on economic theory.
3. Practical. The essence of this function of economic theory is reduced to the substantiation of state policy in this area from the point of view of science. Also in practice, recommendations are developed regarding the use of methods and principles of good housekeeping.
Economic policy looks like a whole system of measures undertaken by the state. All of them are aimed at developing the national economy and affect the interests of all social classes. It is in her competence to determine the best possible solutions to problems arising in this area.
Economic theory and practice are in close relationship with each other. Without two-way communication, they lose all meaning. So, it is the practice that forms the order for theoretical research. It provides material for scientific analysis and provides a final assessment of the viability of any theory. Practice is a true criterion for the authenticity of knowledge in economics. She prompts to study. It also leads to forecasting, the next step from which is rational action, which requires constant improvement of practice. Such a cycle repeats endlessly, while each time rising to a higher level.
4. Predictive. It manifests itself in the development of a scientific justification for predicting the prospects for the country's development in the future in terms of the economy and society. In practice, it comes down to developing forecasts for the implementation of long-term programs related to the development of social production. Moreover, future resources, costs, and options for the final results are taken into account.
5. Educational. The meaning of this function of economic theory is to form the citizens' analytical abilities, the modern type of thinking, logic and culture. All this will help them in the new market system to develop economic, competent behavior. The result of the effective impact of this function is the formation of a holistic picture among the population about how the economic system works at the level of the nation and the whole world. In addition, she fosters the understanding that only deep knowledge, initiative and enterprise, hard work, informed decision-making and the ability to take responsibility for our own actions in the face of fierce competition will help to achieve a high standard of living and success in the profession.
Currently, the country continues the transition to market relations. Therefore, in modern conditions, the subject and functions of economic theory play a significant role. Indeed, deep knowledge is simply necessary in order to change living conditions for the better. It is impossible to do this without mastering the economic laws and mechanisms of their use in economic activity, without the ability to recognize the nature of interdependencies and interconnections in this area.