The functions of economic theory. Theory and practice of economic management.

a) theoretic - cognitive function is aimed at depicting the essence of economic laws and categories and essential causal relationships of economic phenomena and processes, forms of their expression, their typical inner contradictions, the development of which ensures successive economic progress of society, as well as the mechanism of laws realization;

b) practical function is aimed at a full explanation of definite ways of economic laws application and overcoming the forms of contradictions that stop the development of economy, thus at formation of a scientific base of economic policy of a state.

c) ideological function is aimed at the formation of the new type of economic-theoretical thinking of officials of different ranks;

d) methodological function:

- serves a base of the use of general scientific and philosophic principles and dialectics categories for most of the economic disciplines as well as for economic theory;

- grounds fundamental economic categories for these disciplines with the account of historical method;

- gives the knowledge of the most important means of development and perfection of economic system and as a result of it influences the cognition of ways of development of definite branches of economy.

Methodological system of economic analysis:

a) The major method of economic processes cognition is the one of materialistic dialectics. It’s based on the idea of matter primacy while defining the meaning of consciousness. Dialectic al approach means:

- phenomena are considered not in statics, but from the moment of birth to death;

- development is considered from the simple to the complicated, from the lowest to the highest;

- a transition from the concrete to the abstract and again to the concrete is observed while research;

- contradictions and their elimination are considered to be the moving force of development.

b) The Main methods of the economics investigations, which are used in economic theory, are the follows:

- Methods of a scientific abstraction

- The Analysis

- The syntheses

- Induction

- Deduction

- Experiment

- a method of qualitative and quantitative

- mathematical and statistical methods

1. methods of a scientific abstraction - is based on abstraction of secondary phenomena, separation and study the most important, typical things in economic processes that allow to formulate typical of the notions, categories, economic laws;

2. The Analysis - is a process of the dismemberment integer on a component parts;

3. The syntheses - is an integration process or phenomena’s different element, into united integer.

4. The analysis allows revealing the scientific abstractions, notions, but their following integration (the syntheses) brings about deeper studying to essence of the process, phenomena as integer;

5. Except the methods mentioned above, there are used methods history and logical approach, induction (from individual to the general) and deductions (from the general to individual), method analogy. Usage of all these methods in scientific investigations allows formulating the hypothesis - a scientifically motivated suggestion about possible relationship, relations, and reasons of the phenomena.

6. In the course of undertaking the economic reforms the experiment is used, but its undertaking requires very careful preparation, calculation, and motivation.

7. a method of qualitative and quantitative analysis allows to use the new approaches in investigation rate and proportion of the economy’s development, expects clear revealing process’s qualitative certainty and revealing that of its element, which can be measured as quantitative, allows to study the process in dynamics;

8.mathematical and statistical methods ensure the integration qualitative and quantitative analysis.