An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location. The economic agents can be individuals, businesses, organizations, or governments. Transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency.
In the past, economic activity was theorized to be bounded by natural resources, labor, and capital. This view ignores the value of technology (automation, accelerator of process, reduction of cost functions), and innovation (new products, services, processes, new markets, expands markets, ...view middle of the document...
A command-based economy is where a central political agent commands what is produced and how it is sold and distributed. Shortages are common problems with a command-based economy, as there is no mechanism to manage the information (prices) about the systems natural supply and demand dynamics.
* 1 Range
* 2 Etymology
* 3 History
* 3.1 Ancient times
* 3.2 Middle ages
* 3.3 Early modern times
* 3.4 The industrial revolution
* 3.5 After World War II
* 3.6 Late 20th – beginning of 21st century
* 4 Economic phases of precedence
* 5 Economic measures
* 5.1 GDP
* 6 Informal economy
* 7 See also
* 8 Notes
* 9 References
* 10 Further reading
Today the range of fields of study examining the economy revolve around the social science of economics, but may include sociology (economic sociology), history (economic history), anthropology (economic anthropology), and geography (economic geography). Practical fields directly related to the human activities involving production, distribution, exchange, and consumption of goods and services as a whole, are engineering, management, business administration, applied science, and finance.
All professions, occupations, economic agents or economic activities, contribute to the economy. Consumption, saving, and investment are variable components in the economy that determine macroeconomic equilibrium. There are three main sectors of economic activity: primary, secondary, and tertiary. Sabine O’Hara argues that care work is the basis for all economic activity, concluding that "everything needs care," not only people, but animals and things.
Due to the growing importance of the financial sector in modern times, the term real economy is used by analysts as well as politicians to denote the part of the economy that is concerned with actually producing goods and services, as ostensibly contrasted with the paper economy, or the financial side of the economy, which is concerned with buying and selling on the financial markets. Alternate and long-standing terminology distinguishes measures of an economy expressed in real values (adjusted for inflation), such as real GDP, or in nominal values (unadjusted for inflation).
The English words "economy" and "economics" can be traced back to the Greek word οἰκονόμος (i.e. "household management"), a composite word derived from οἶκος ("house") and νέμω ("manage; distribute") by way of οἰκονομία ("household management").
The first recorded sense of the word "economy" is in the phrase "the management of œconomic affairs", found in a work possibly composed in a monastery in 1440. "Economy" is later recorded in more general senses, including "thrift" and "administration".
The most frequently used current sense, denoting "the economic system of a country or an area", seems not to have developed until the 19th or 20th...