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Related to economy: World 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.


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.


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 classic literature ?
The world economy, the world environment, the world AIDS crisis, the world arms race: they affect us all.
for they may be fixed as in other arts; for the instruments of no art whatsoever are infinite, either in their number or their magnitude; but riches are a number of instruments in domestic and civil economy; it is therefore evident that the acquisition of certain things according to nature is a part both of domestic and civil economy, and for what reason.
Such a wife might awaken you some fine morning with a new scheme for the application of her income which would interfere with political economy and the keeping of saddle-horses: a man would naturally think twice before he risked himself in such fellowship.
Our modest income is amply sufficient for our requirements: and by practising the economy we learnt in harder times, and never attempting to imitate our richer neighbours, we manage not only to enjoy comfort and contentment ourselves, but to have every year something to lay by for our children, and something to give to those who need it.
I gave over attempts on heavy study, such as jurisprudence, political economy, and biology, and tried lighter stuff, such as history.
Do you understand Political Economy and the Laws of Supply and Demand?
Political Economy shrieked at the horrid proposal; the Laws of Supply and Demand veiled their majestic faces in dismay.
I further attempted to show that from the varying descendants of each species trying to occupy as many and as different places as possible in the economy of nature, there is a constant tendency in their characters to diverge.
It might have been thought (and was in ancient times thought) that those parts of the structure which determined the habits of life, and the general place of each being in the economy of nature, would be of very high importance in classification.
He had come to feel with increasing indignation that the modern industrial system, the materialistic political economy founded on it, and the whole modern organization of society reduce the mass of men to a state of intellectual, social, and religious squalor and blindness, and that while they continue in this condition it is of little use to talk to them about Beauty.
In the earlier series of books containing, among others, Bosanquet's "History of Aesthetic," Pfleiderer's "Rational Theology since Kant," Albee's "History of English Utilitarianism," Bonar's "Philosophy and Political Economy," Brett's "History of Psychology," Ritchie's "Natural Rights," these objects were to a large extent effected.
Political economy told him that the laws by which the wealth of Europe had been developed, and was developing, were universal and unvarying.