Economic Institutions
Definition
Economic institutions are structures created by individuals and societies to control economic activities. They include banks, stock exchanges, regulatory bodies etc., which govern economic behavior and transactions.
Analogy
Economic institutions are like referees in a football game. They don't play the game themselves, but they set and enforce the rules to ensure fair play.
Related terms
Monetary Policy: The policy adopted by the monetary authority of a country that controls either the interest rate payable for very short-term borrowing or the money supply.
Fiscal Policy: Government policy that attempts to manage the economy by controlling taxing and spending.
Market Economy: An economic system in which production and prices are determined by unrestricted competition between privately owned businesses.
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