economy

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Economy

The production, trade, and use of goods and services. The economy is the interaction between different actors, such as individuals, companies, and governments, in order to maximize the fulfillment of their needs through the use of scarce resources. The relationship between supply and demand is vitally important to how an economy operates, though economists disagree on exactly how.

There are a number of schools of thought within the study of the economy. Some major schools are classical economics, which considers the sources of production as well as the role of the Invisible Hand of the market, and Marxism, which considers the exploitation of labor by holders of capital. Other, modern schools of thought include Keynesianism, which emphasizes the role of demand as opposed to supply, and monetarism, which promotes the use of the free market and considers the role of money supply in economic growth. See also: Macroeconomics, Microeconomics.

economy

a country defined in terms of the total composition of its economic activities and the ultimate location of economic decision-making.

The total value of goods and services produced in any one year is called the gross domestic product. The contribution made to total output by the various subdivisions of the economy can be split down in various ways: for example, by broad sectors such as the primary sector (agriculture), the industrial sector (including manufacturing) and the tertiary sector (services); or by individual activities (brewing, coal-mining, etc.).

Economic decision-making in the economy may be either highly centralized or decentralized. In a centrally planned economy the State owns the means of production (except labour) and decides what goods and services are to be produced in accordance with a national plan. Resources are allocated between producing units, and final outputs between consumers by the use of physical quotas. At the other extreme, in a private enterprise economy (free market or capitalist economy) the means of production are held by individuals and firms. Economic decision-making is highly decentralized with resources being allocated through a large number of individual goods and services markets. It is the MARKET which synchronizes the decisions of buyers and sellers by establishing market prices which determine how much of a product will be produced and sold. In practice, a large number of countries, including the UK, are mixed economies with some goods and services being provided by private enterprise and others, typically public-utility type products such as postal services and railways, being supplied by the State. The precise mix of private enterprise and State activities to be found in particular countries, however, does vary substantially between the two extremes and is very much influenced by prevailing political ideologies. See INDUSTRY, STRUCTURE OF INDUSTRY, NATIONALIZATION VERSUS PRIVATIZATION.

economy

a country defined in terms of the total and composition of its economic activities. The total value of goods and services produced in an economy in any one year is called GROSS DOMESTIC PRODUCT (GDP). The contribution made to GDP by the various subdivisions or sectors of the economy can be viewed in a variety of ways: for example, either by broad sectors (the PERSONAL or household SECTOR, the CORPORATE or business SECTOR, the FINANCIAL SECTOR, PUBLIC (GOVERNMENT) SECTOR, the FOREIGN SECTOR), or by individual industries. See STRUCTURE OF INDUSTRY, ECONOMIC SYSTEM.
References in periodicals archive ?
It was already chaos and it has now become more chaotic with the fears of 'inflation, unemployment, dismissal of workers and an increase in the budget deficit'," Dairy said, referring to the fears of inflation and the laying off of workers expressed by the representatives of the economic sector if the wage decision is implemented.
Urbanized coastal watersheds are affected by numerous competing economic sectors, which can include tourism, fisheries, agriculture, aquaculture, forestry, manufacturing, oil and gas extraction, waste disposal, marine transportation, and real estate development.
We rely on diplomatic action to strengthen Tunisia's presence in the world as well as on the role of ambassadors to rally support for the fight against terrorism which has become an international scourge, convey a positive image of the country and promote the economic sector," he pointed out.
Abdulrahman Al-Zamil, who will head the Saudi business delegation in the Forum, explained that the Saudi private sector's delegation representing many of the economic sectors of priority on the agenda of economic cooperation with Russia economic sectors, adding that the Forum will focus on discussion of cooperation in the areas of agriculture, food security, infrastructure development, transport, power generation, electrical materials, medicine, health care, oil and gas, petrochemicals, real estate, housing and construction.
We are optimistic that market activity will gain further momentum with a resurgence of IPOs, underlining the success of DFM's strategy to achieve the best possible representation of key economic sectors," said Essa Kazim, Chairman of Dubai Financial Market.
Driessen, for his part, voiced enthusiasm of the chamber members to enlarge ties with Iranian traders and economic sectors in order to expand bilateral business relations.
OPPORTUNITIES for growth exist in the majority of economic sectors of Cyprus, President Nicos Anastasiades told a Business Forum in Dubai yesterday on the last day of his four-day visit to the United Arab Emirates.
He pointed out the growth witnessed by various economic sectors in Sudan, inviting Bahrain's trade sector to invest in these sectors.
Muscat: The commercial banks in the Sultanate seek to diversify their credit activities, benefiting from the growth that different economic sectors have shown.
He added, 'The guidebook also provides details on leading economic sectors in Al Gharbia highlighting investment opportunities associated with each sector.
He informed that Asian Productivity Organization (APO) -Japan is a Regional Intergovernmental Organization, established in 1961, comprising of 20 member countries with the mission to contribute to the socio economic development of Asia Pacific region through mutual cooperation by enhancing productivity of all economic sectors, enabling APO member countries to become more productive and competitive.
Public finances (public investment program) should be directed for development of those economic sectors where growth facilitates development of certain economic sectors having multiplicative effect for development of related sectors.