Economy
An economy is a complex system of interrelated production, consumption, and exchange activities that ultimately determines how resources are allocated among all the participants. The production, consumption, and distribution of goods and services combine to fulfill the needs of those living and operating within the economy. An economy may represent a nation, a region, a single industry, or even a family. An economy encompasses all the activities related to the production, consumption, and trade of goods and services in an entity, whether the entity is a nation or a small town. No two economies are identical. Each is formed according to its resources, culture, laws, history, and geography. Each evolves according to the choices and actions of the participants. These decisions are made through market transactions and collective or hierarchical decision-making. In the modern world, few nations are purely market-based or purely command-based. But most lean toward one or the other of these models. Market-based or “free market” economies allow people and businesses to freely exchange goods and services according to supply and demand. The United States is primarily a market economy. Producers determine what’s sold and produced and what prices to charge. If they expect to succeed, they will produce what consumers want and charge what consumers are willing to pay. Command-based economies depend on a central government that controls the production levels, pricing, and distribution of goods. In such a system, the government owns industries deemed essential for the consumers who use them. Competition among companies is discouraged or banned. Prices are controlled. [Investopedia].
The system of trade and industry by which the wealth of a country is made and used [Cambridge Dictionary].
The general sense of economy is the careful management of resources such as money and materials so as not to waste them. Still, the more familiar reference is producing, distributing, and consuming goods and services [Vocabulary.com].
Kenton, W. (2022). Economy: What It Is, Types of Economies, Economic Indicators. Investopedia. Retrieved from: https://www.investopedia.com/terms/e/economy.asp
Economy. Cambridge Dictionary. Retrieved from: https://dictionary.cambridge.org/dictionary/english/economy
Economy. Vocabulary.com. Retrieved from: https://www.vocabulary.com/dictionary/economy