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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 periodicals archive ?
To make the treaty complete, therefore, it should be amended so that those economies experiencing corporate debt repayment are not only exempted from the 3 percent deficit limit but are also required to put in sufficient fiscal stimulus to keep their excess savings problems from spilling beyond their borders.
It is no accident that almost all of the world's most competitive economies are democracies.
JEFFREY MADRICK'S Why Economies Grow is a short work with a big ambition: Debunk mainstream economics about the best way to promote faster economic growth.
For Derrida, it thus seems that earthly and heavenly economies simply represent immanent and transcendental versions of each other, alike in shape, different merely in terms of currency, and with a an extremely good exchange and growth rate, if the investment will pay off.
It may be that other aspects of these East Asian economies have driven their growth and that the statistical analysis of labor-force quality is simply picking out these countries.
One of the biggest stories in Asian economies is Japan's slow-to-negative growth in the 1990s.
economic downturn would slow imports, impacting the economies of Southeast Asia, Latin and South America and Canada.
Thus, problems that appeared first in Thailand more than a year ago quickly spread to other East Asian economies that are relatively new participants in the international financial system, and subsequently to Russia and to some degree to eastern Europe and Latin America.
What is important to us is that they have been forced to look beyond the simple introduction of technology as a panacea for stagnant economies.
Economies in most of the major industrial democracies are essentially stagnant.
to provide the dynamism and to stimulate the growth that their economies lack.
Growth in the world and the industrialized economies in 1995 was slower than expected.

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