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 meeting was attended by Deputy Minister of Economy and Planning Ahmed bin Ibrahim Al-Hakami and Japanese Ambassador to the Kingdom of Saudi Arabia Shigeru Endo.
Kyrgyzstan confirmed its participation in building of common customs space within Eurasian Economic Community, Minister of Economy Temir Sariev said on March 29.
Summary: Sultan bin Saeed Al Mansouri, UAE Minister of Economy, has discussed with the State Secretary of the Ministry of Economy of the Slovak Republic, Pavol Pavlis the bilateral relations and ways to boost them, especially at the economic, trade and investment levels.
Summary: Cairo, 16 Muharram, 1432/22 December, 2010, SPA -- Under the chairmanship of Minister of Economy and Planning of the Kingdom of Saudi Arabia Khalid bin Mohammed Al-Qusaibi, Council of Arab Ministers of Housing and Reconstruction concluded here today its 37th session.
In executing the Offer, Domingo Latorraca, Vice Minister of Economy of Panama, noted: "Today the Republic successfully achieved a number of its financing objectives.
Summary: Minister of Economy, Sultan bin Saeed Al Mansouri, and the First State Secretary of the Ministry of Economy of the Slovak Republic, Pavol Pavlis, discussed ways to enhance economic, trade and investment cooperation and relations between the two countries, on Sunday.
Summary: Tunis, Muharram 05, 1432, Dec 11, 2010, SPA -- Deputy Minister of Economy and Planning Ahmad Alhakami called for benefiting from Japanese technology and for transferring it to the Arab region.
Summary: The UAE expects up to four per cent economic growth in 2012, according to the UAE Minister of Economy Sultan bin Saeed Al Mansouri.
Musleh bin Hamid Al-Otaibi met here on Saturday evening with the Minister of Economy, Labor and Transport of Lower Saxony State of Federal Republic of Germany J?
Summary: Economic, trade and investment relations between the UAE and Belarus are poised for more development based on their willingness to create opportunities and promising venues of cooperation, according to Sultan Saeed Al Mansouri, Minister of Economy.
21, 2010, SPA -- Ali Awwad Asiri, Saudi Ambassador to Lebanon, met here today Mohammad Safadi, Lebanese Minister of Economy and Trade.
This morning, at the first meeting of the newly established taskforce to implement structural reform and employment measures in Japan, Minister of Economy, Trade and Industry Takeo Hiranuma presented a "Hiranuma Plan" containing specific measures to encourage new market and job creation.

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