Economy

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DEFINITION of 'Economy'

The large set of inter-related economic production and consumption activities which aid in determining how scarce resources are allocated.

INVESTOPEDIA EXPLAINS 'Economy'

The economy encompasses everything related to the production and consumption of goods and services in an area.

The economy and the factors affecting the economy have spawned one of the largest fields of study in human history - economics. The study of economics can be broken into two major areas of focus, microeconomics and macroeconomics.

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Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
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    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
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    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
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    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
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