Economy refers to the management of resources for the purpose of supplying the wants of people living or operating within the scope of its operations. It is a complex system, encompassing a nation, a region or even just one industry or family.
Man is naturally inclined to be economical, spending little of what he has and gaining much of what he wants. He saves, conserves, invents and devises all manner of devices to increase his production of goods or services to supply his wants. This natural bent toward economy produces an array of modes and devices which constitute an economy in any locale.
Almost all aspects of a society are affected by the state of the economy. A person’s choices on how to spend his money, whether to continue his education or to take a part-time job, are economic decisions. Companies decide what products to produce, how to price them and how many employees to hire based on their economic expectations. Governments regulate and provide public goods and services (highways, schools, police and courts, hospitals and unemployment insurance) and collect taxes from households and businesses to pay for them.
The state of the economy is often measured by the rate of inflation, the GDP, unemployment and the balance of trade between countries. The higher the GDP, the more prosperous a country is and the lower the unemployment, the better. The balance of trade is the difference between what a country pays for its imports and what it receives in exports.
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