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 ?
The data and statistics of every economic sector are updated on a monthly basis.
The economic sectors refuse to implement the wage increase decision for several reasons, the most important of which is the inability of economic institutions to bear the burdens of this decision," said the statement which was published by AS SAFIR and other newspapers on Thursday.
The disruption of trade and economic sectors could have lethal repercussions and erode national security," Cabinet Affairs Minister Kamal Ahmed said.
Looking ahead, a key to the success of small developing economies in their integration into the international economy is the ability to build competitive industries and economic sectors, according to Lourdes Smith, executive director, Belize Trade and Investment Development Service (Beltraide).
Capitalism is a force of incessant "creative destruction," economist Joseph Schumpeter wrote in 1942, capable of provoking rapid and violent change in economic sectors and by extension among the lives of us mere mortals who inhabit them.
Ultimately, it is his belief that the forest industry will continue to be the single, most important economic sector in the region's economy.
Governments that set up ICM programs encourage participation by a wide variety of stakeholders across economic sectors.
As such, his complex portrayal of the European economy after 1350 -- one in which economic sectors in some areas flourished while other sectors in other regions declined -- is presciently consistent with the rich and complicated image that historians accept today.
The decline in imports was most notable in key economic sectors including manufacturing, construction, and transportation.
The focus was on specific economic sectors, such as information technology, transportation and construction.
Dommel described the needed `islands of integrity' as pockets of clean economic practice in either geographical areas or economic sectors.
IntelliNews CIS Sector Updates comprises analytical overviews of more than 80 economic sectors across the CIS region, mainly focusing on Russia, Ukraine, and 5 countries of Central Asia.