Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025
Definition
An economy encompasses all activities related to production, distribution, and consumption of goods and services within a society. It outlines how resources are allocated, jobs are created, and how wealth circulates among individuals and businesses.
Related terms
Market: A system where buyers and sellers interact to exchange goods and services for money, often determining prices through supply and demand.
An economic system where private individuals rather than the state own and control property and businesses, operating for profit in competitive markets.
Labor Force: The total number of people employed or seeking employment in an economy at any given time