Economy

An economy (from Ancient Greek οἰκονομία (oikonomía) 'management of a household, administration'; from οἶκος (oîkos) 'household', and νέμω (némō) 'distribute, allocate') is an area of the production, distribution and trade, as well as consumption of goods and services by different agents. In general, it is defined 'as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of scarce resources'. A given economy is a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of interrelated human practices and transactions that does not stand alone.

Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two groups or parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. However, monetary transactions only account for a small part of the economic domain.

Economic activity is spurred by production which uses natural resources, labor and capital. It has changed over time due to technology, innovation (new products, services, processes, expanding markets, diversification of markets, niche markets, increases revenue functions) such as, that which produces intellectual property and changes in industrial relations (most notably child labor being replaced in some parts of the world with universal access to education).

A market-based economy is one where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or a medium of exchange with a credit or debit value accepted within the network, such as a unit of currency. A command-based economy is one where political agents directly control what is produced and how it is sold and distributed. A green economy is low-carbon, resource efficient and socially inclusive. In a green economy, growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services. A gig economy is one in which short-term jobs are assigned or chosen via online platforms. New economy is a term that referred to the whole emerging ecosystem where new standards and practices were introduced, usually as a result of technological innovations. The global economy refers to humanity's economic system or systems overall.

Today the range of fields of study examining the economy revolves 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.

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 the actual production of 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;household;home") and νέμω ("manage; distribute;to deal out;dispense") 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.[citation needed] "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 1650s.