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.
In the mid-18th century, economist Adam Smith defined the elements of a national economy based on the following key concepts: competition (which determines the value of goods and services), supply and demand, and the division of labor. These are still used to analyze the economic state of nations. National economies are often discussed in terms of their gross national product, which is the estimated value of a country's production by its nationals within its geographic boundaries, and gross domestic product, which is the estimated worth of a country's production by its citizens.