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An economy or economic system consists of the production, distribution or trade,and consumption of limited goods and services by different agents in a given geographical location. The economic agents can be individuals, businesses, organizations, or governments. Transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency.In the past, economic activity was theorized to be bounded by natural resources,labor, and capital. This view ignores the value of technology (automation, accelerator of process, reduction of cost functions), and creativity (new products,services, processes, new markets, expands markets, diversification of markets, niche markets, increases revenue functions), especially that which produces intellectual property.A given economy is the result of 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 setthe conditions and parameters in which an economy functions.A market-based economy is where goods and services are produced without obstruction or interference, 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 and at some freemarket or market clearing price. Capital and labor can move freely to any areaof emerging shortage, signaled by rising price, and thus dynamically and automatically relieve any such threat. Market based economies require transparency on i

nformation, such as true prices, to work, and may include various kinds of immaterial production, such as affective labor that describes work carried out that is intended to produce or modify emotional experiences in people, but does not have a tangible, physical product as a result.A command-based economy is where a central political agent commands what is produced and how it is sold and distributed. Shortages are common problems with a command-based economy, as there is no mechanism to manage the information (prices)about the systems natural supply and demand dynamics.Contents [hide]1 Range2 Etymology3 History3.1 Ancient times

3.2 Middle ages3.3 Early modern times3.4 The industrial revolution3.5 After World War II3.6 Late 20th - beginning of 21st century4 Economic phases of precedence5 Economic measures5.1 GDP6 Informal economy7 See also8 Notes9 References10 Further reading

Range[edit]

Today the range of fields of study examining the economy revolve 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 asa whole, are engineering, management, business administration, applied science,and finance.All professions, occupations, economic agents or economic activities, contribute

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to the economy. Consumption, saving, and investment are variable components inthe 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,[1] the term real economy is used by analysts[2][3] as well as politicians[4] to denote the part of the economy that is concerned with actually producing goods and services,[5] as ostensibly contrasted with the paper economy, or the financial side ofthe economy,[6] 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).[7]Etymology[edit]

The English words "economy" and "economics" can be traced back to the Greek words ???????? (i.e. "one who manages a household"), a composite word derived from ????? ("house") and ??? ("manage; distribute") by way of ???????a ("household management").The first recorded sense of the word "economy" is in the phrase "the managementof conomic affairs", found in a work possibly composed in a monastery in 1440. "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 19th or 20th century.[8]History[edit]

Ancient times[edit]See also: Palace economyAs long as someone has been making, supplying and distributing goods or services, there has been some sort of economy; economies grew larger as societies grew and became more complex. Sumer developed a large-scale economy based on commoditymoney, while the Babylonians and their neighboring city states later developedthe earliest system of economics as we think of, in terms of rules/laws on debt,legal contracts and law codes relating to business practices, and private property.[9]The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts.[10] They developed the first known codified legal and administrative systems, complete with courts, jails

, and government records.The ancient economy was mainly based on subsistence farming. The Shekel referredto an ancient unit of weight and currency. The first usage of the term came from Mesopotamia circa 3000 BC. and referred to a specific mass of barley which related other values in a metric such as silver, bronze, copper etc. A barley/shekel was originally both a unit of currency and a unit of weight... just as the British Pound was originally a unit denominating a one pound mass of silver.For most people the exchange of goods occurred through social relationships. There were also traders who bartered in the marketplaces. In Ancient Greece, wherethe present English word 'economy' originated, many people were bond slaves of the freeholders. Economic discussion was driven by scarcity.Middle ages[edit]In Medieval times, what we now call economy was not far from the subsistence lev

el. Most exchange occurred within social groups. On top of this, the great conquerors raised venture capital (from ventura, ital.; risk) to finance their captures. The capital should be refunded by the goods they would bring up in the New World. Merchants such as Jakob Fugger (14591525) and Giovanni di Bicci de' Medici(13601428) founded the first banks.[citation needed] The discoveries of Marco Polo (12541324),[dubious discuss] Christopher Columbus (14511506) and Vasco da Gama (14691524) led to a first global economy. The first enterprises were trading establishments. In 1513 the first stock exchange was founded in Antwerpen. Economy atthe time meant primarily trade.Early modern times[edit]