Living in the modern world, it’s hard enough to stay out of the economy. It affects absolutely all spheres of human life. From micro to world level, this science allows organizing trade and production relations in the best possible way.
To make it easier to understand what the economy is, you should consider this concept in more detail. It is very capacious, so one definition will not work here. The question of what is called the country's economy should be delved into as deeply as possible. Different people put their own meaning into this concept. But one thing remains unchanged: each person in one way or another is faced with economic terms and processes. Therefore, everyone should understand what kind of science this is.
Origin of the economy
It is believed that the word "economy" has an ancient Greek origin. He was glorified in 384–322. BC e. Aristotle. He combined the words "eikos" (economy) and "nomos" (law). Therefore, literally translating the concept of "economy of the country" sounds like "the science of farming."
In those days, every house tried to provide itself with everything necessary. This model of the economy is called natural. But exchange and trade already existed then. Although their volume was much smaller. However, over time, the rules for such an exchange were developed, its scale increased. Therefore, what is the economy, people have known for more than one thousand years.
The modern housekeeping system is very different from its natural appearance. Today, most of the necessary goods are produced in enterprises. Households produce significantly less things and everyday items.
Modern meaning
Since those ancient times, the significance of this science is understood in a slightly different way. The economy has expanded its sphere of influence and has become more global in nature. Now the country's economy is her National economy, which consists of many industries, district, regional systems.
It is also a trade relationship between people that corresponds to the level of development of production that the national economy has reached.
Economics is also called a scientific discipline that studies the laws of such systems. If you bring all these statements together, you get the following definition: an economy is a system of farming that provides people with the necessary products and benefits.
Levels
There are economic levels that are regulated according to the system of organizational relations. There are also global and local structures. Sectors of the economy can affect both macro levels and microsystems of management.
Microeconomics explores individual units of trade and production relations (enterprises, traders, consumers, etc.). It identifies processes at the lowest levels and explains how they affect global areas.
Macroeconomics studies the functioning of the economy as a whole at the national, global level. Its competence includes such objects as unemployment, national income, inflation, etc. This makes it possible to identify negative processes in this sphere of the economy and eliminate them on a global scale. This affects lower levels.
The role of the economy
The definition of "economy" lies in the field of its purpose. Nature gives man the most necessary conditions for life. This is water, air, food, heat, etc. However, modern people need more.
In order to satisfy the needs of society, industries, agricultural complexes, services, etc. are being created.The economy is studying what people need today, and is looking for ways to provide them with these benefits. Moreover, those things, services that a person needs are unlimited. If hunger is satisfied, a person will want to develop on a spiritual level. Therefore, the desires of people have no limits.
Subject and object of research
The subject of research of this science is the organization of activities that create the benefits necessary for society. Economic issues examine how humanity, groups of people use products, services that exist in limited quantities. To what extent are existing goods able to satisfy unlimited needs.
This science studies how a person behaves in conditions of limited resources with unlimited needs. This is the subject of her research.
The object of study is the three main participants. Economic issues are considered processes of commodity exchange of a family, enterprise or state. They are closely related. After all, the organization of processes at the macro level depends on those decisions that people make at the very initial stages of management.
Industry structure
The economy has an industry structure. In it, you can define 3 large groups:
- Primary economic models (mining, agriculture, fisheries, etc.).
- Processing products of the first group (food industry, metallurgy, etc.).
- Branches of services (transport, trade).
All of them aim to provide better living conditions for the whole society. The service sector improves the quality of the system at different levels. It is aimed at meeting the needs of society, production and the state.
Economic activity
Models of the economy are influenced by economic activity. It represents the efforts of people to meet the needs of the moment. This happens with a certain calculation, which is sometimes erroneous. To understand what an economy is, you should consider the steps economic activity.
Management goes through the stages of production, distribution, exchange, and then consumption. They are all interconnected. All this time goes through the process of reproduction. It can be performed in the same volume or be more (less). The economy is a continuous process of reproduction.
Economic management
There are several types of economic systems. They differ in the processes of exchange, distribution of resources and their regulation. Today stands out the traditional, market, team and mixed models.
The economy of the traditional system is regulated on the basis of an unchanging lifestyle. Here it has long been known what and how to distribute and produce. But this leads to a low standard of living of the population.
The market economy is characterized by the presence of trading floors and private property. There is freedom and personal gain for people. Enterprises seek to make a profit, and processes are regulated under the influence of supply and demand.
At command economy property is characterized as public. Regulation takes place centrally through planning. Prices do not change under the influence of supply and demand. They are established by the state. Enterprises do not operate for profit, but to fulfill the plan.
In the most developed countries there is a mixed type of economic regulation. It contains elements of a market and command system. This allows you to compensate for the shortcomings of each type of organization of economic relations. At the same time, the state intervenes in the economy to regulate some processes. This allows you to protect the national interests of the country.
Having delved into the concept of what economics is, we can conclude that this is a science that studies economic relations, which allows us to analyze the processes of interaction between various entities of systems at all levels.Exploring the unlimited needs of humanity and limited resources, it helps to achieve their most stable balance. This contributes to the harmonious development of society and allows the use of raw materials, materials, various services in the most rational way.
