DEFINITION of 'Economy'

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


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.

  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects ...
  3. Totnes Pound

    An alternative currency of Totnes, in Devon, United Kingdom. ...
  4. Economic Conditions

    The state of the economy in a country or region. Economic conditions ...
  5. Laissez Faire

    An economic theory from the 18th century that is strongly opposed ...
  6. Economics

    A social science that studies how individuals, governments, firms ...
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  1. Is the Social Security administration part of the executive branch?

    The U.S. Social Security Administration, or SSA, is an independent government agency under the purview of the executive branch. ... Read Full Answer >>
  2. What are the main risks to the economy of a country that has implemented a policy ...

    The main risk to the economy of a country that has implemented a policy of austerity is the potential for a self-reinforcing, ... Read Full Answer >>
  3. How does the notion of the American Dream influence the US economy?

    The notion of the American Dream influences the U.S. economy because it creates the driving force behind the free enterprise ... Read Full Answer >>
  4. Does raising the minimum wage increase inflation?

    There are conflicting views on whether raising the minimum wage increases inflation. Tied to this is the question of what ... Read Full Answer >>
  5. What are some popular ETFs that track the industrial sector?

    As of April 2015, some of the most popular and best performing exchange-traded funds (ETFs) that track the industrial sector ... Read Full Answer >>
  6. What does a large multiplier effect signify?

    The multiplier effect depends on banks' reserve requirements. In macroeconomics, if a country exhibits a large multiplier ... Read Full Answer >>
  7. How does the long-term outlook of the Internet sector compare to the broader economy?

    The long-term outlook of the Internet sector is brighter than the broader economy, although winners and losers are unclear. ... Read Full Answer >>
  8. How does automated work affect structural unemployment rates?

    One of the main causes of structural unemployment is the automation of work. If jobs become increasingly automated, more ... Read Full Answer >>
  9. What is the difference between structural unemployment and cyclical unemployment?

    Structural unemployment and cyclical unemployment occur throughout an economy. Structural unemployment is caused by shifts ... Read Full Answer >>
  10. Is the substitution effect negative for consumers?

    The substitution effect is both positive and negative for consumers. It is positive for consumers because it means that they ... Read Full Answer >>
  11. What is the difference between frictional unemployment and structural unemployment?

    Structural unemployment and frictional unemployment are two different types of unemployment that occur in an economy. Frictional ... Read Full Answer >>
  12. What countries contribute the largest weight to the global electronics sector?

    As of 2015, China, the United States and Germany are at the front of the pack in producing electronics on a global level. ... Read Full Answer >>
  13. What is the aerospace sector?

    The aerospace sector, one of the largest and most powerful industries in the United States, supplies five markets: military ... Read Full Answer >>
  14. How is an economy formed and why does it grow?

    Broadly speaking, an economy is an inter-related system of human labor, exchange and consumption. An economy forms naturally ... Read Full Answer >>
  15. What is the difference between inflation and stagflation?

    Inflation is a term used by economists to define broad increases in prices. Inflation is the rate at which the price of goods ... Read Full Answer >>
  16. How do government-issued stimulus checks affect the economy?

    Stimulus checks are payments given to individuals by the government based on taxes paid in the previous year. The hope is ... Read Full Answer >>

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