The economy, as a system of resource use and distribution, is important because resources are finite. Understanding the economy is crucial to political awareness and becoming an informed citizen.
"Economy" means the total resources of a community or country. Therefore, economy compasses many things, such a money, the wealth of citizens, and the amount of commodities or products available for consumption. Although there are many ways of measuring the economy, the GDP, or gross domestic produc
One definition of "economy" is the management of a nation's, state's or community's resources, especially in regard to money. A similar and somewhat intertwined definition is the prosperity of such a place.
A closed economy refers to an economic system which does not have business relations with any economies outside its own system. Closed economies employ barriers to the trade of goods and services, monies and intellectual property to and from their economic system.
A national economy refers to the economy of an entire country. The national economy includes financial resources and management. It encompasses the value of all goods and services manufactured within a nation.
A market economy is based on the principles of supply and demand, and lets business survive or fail without much interaction from the government. A pure market economy is impractical to implement, most market economies around the world have a component of government influence.
Countries whose economies attract minimal involvement of the government have a market economy. According to a 2013 Index of Economic Freedom, the United States, Canada, Denmark, the United Kingdom, Hong Kong and Mauritius have a market economy. Most market economies have a degree of state-dictated p
North Korea, Cuba and Zimbabwe are countries that have planned economies. The largest country to have a planned economy was the Soviet Union. A planned economy, or a command economy, involves near-total government control of industries, commerce, manufacturing, output and economic activity. A large
The bartering of hunted prey used by the Inuit tribes in northern Canada is an example of a traditional economy. So too is the economy of the Sami reindeer herders in northern Scandinavia. Both rely on traditional subsistence techniques as the driving force behind their economic activity.
In a traditional economy, products and goods are created as a result of traditions, customs and beliefs. Countries with a traditional economy use the barter system or trading as a primary form of currency. This type of economic system is generally found in rural areas or farm-based areas.