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 ge ographical location. The economic agents can be individuals, businesses, organiz ations, or governments. Transactions occur when two parties agree to the value o r price of the transacted good or service, commonly expressed in a certain curre ncy. In the past, economic activity was theorized to be bounded by natural resources, labor, and capital. This view ignores the value of technology (automation, acce lerator of process, reduction of cost functions), and creativity (new products, services, processes, new markets, expands markets, diversification of markets, n iche markets, increases revenue functions), especially that which produces intel lectual property. A given economy is the result of a set of processes that involves its culture, v alues, education, technological evolution, history, social organization, politic al structure and legal systems, as well as its geography, natural resource endow ment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. A market-based economy is where goods and services are produced without obstruct ion or interference, and exchanged according to demand and supply between partic ipants (economic agents) by barter or a medium of exchange with a credit or debi t value accepted within the network, such as a unit of currency and at some free market or market clearing price. Capital and labor can move freely to any area of emerging shortage, signaled by rising price, and thus dynamically and automat ically relieve any such threat. Market based economies require transparency on i nformation, such as true prices, to work, and may include various kinds of immat erial production, such as affective labor that describes work carried out that i s intended to produce or modify emotional experiences in people, but does not ha ve a tangible, physical product as a result. A command-based economy is where a central political agent commands what is prod uced and how it is sold and distributed. Shortages are common problems with a co mmand-based economy, as there is no mechanism to manage the information (prices) about the systems natural supply and demand dynamics. Contents [hide] 1 Range 2 Etymology 3 History 3.1 Ancient times 3.2 Middle ages 3.3 Early modern times 3.4 The industrial revolution 3.5 After World War II 3.6 Late 20th - beginning of 21st century 4 Economic phases of precedence 5 Economic measures 5.1 GDP 6 Informal economy 7 See also 8 Notes 9 References 10 Further reading Range[edit] Today the range of fields of study examining the economy revolve around the soci al science of economics, but may include sociology (economic sociology), history (economic history), anthropology (economic anthropology), and geography (econom ic geography). Practical fields directly related to the human activities involvi ng production, distribution, exchange, and consumption of goods and services as a whole, are engineering, management, business administration, applied science, and finance. All professions, occupations, economic agents or economic activities, contribute

to the economy. Consumption, saving, and investment are variable components in the economy that determine macroeconomic equilibrium. There are three main secto rs of economic activity: primary, secondary, and tertiary. Due to the growing importance of the financial sector in modern times,[1] the te rm real economy is used by analysts[2][3] as well as politicians[4] to denote th e part of the economy that is concerned with actually producing goods and servic es,[5] as ostensibly contrasted with the paper economy, or the financial side of the economy,[6] which is concerned with buying and selling on the financial mar kets. Alternate and long-standing terminology distinguishes measures of an econo my expressed in real values (adjusted for inflation), such as real GDP, or in no minal values (unadjusted for inflation).[7] Etymology[edit] The English words "economy" and "economics" can be traced back to the Greek word s ???????? (i.e. "one who manages a household"), a composite word derived from ?? ??? ("house") and ??? ("manage; distribute") by way of ???????a ("household manage ment"). The first recorded sense of the word "economy" is in the phrase "the management of conomic affairs", found in a work possibly composed in a monastery in 1440. "E conomy" is later recorded in more general senses, including "thrift" and "admini stration". The most frequently used current sense, denoting "the economic system of a count ry or an area", seems not to have developed until the 19th or 20th century.[8] History[edit] Ancient times[edit] See also: Palace economy As 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 a nd became more complex. Sumer developed a large-scale economy based on commodity money, while the Babylonians and their neighboring city states later developed the 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 prope rty.[9] The Babylonians and their city state neighbors developed forms of economics comp arable to currently used civil society (law) concepts.[10] They developed the fi rst known codified legal and administrative systems, complete with courts, jails , and government records. The ancient economy was mainly based on subsistence farming. The Shekel referred to an ancient unit of weight and currency. The first usage of the term came fro m Mesopotamia circa 3000 BC. and referred to a specific mass of barley which rel ated other values in a metric such as silver, bronze, copper etc. A barley/sheke l was originally both a unit of currency and a unit of weight... just as the Bri tish Pound was originally a unit denominating a one pound mass of silver. For most people the exchange of goods occurred through social relationships. The re were also traders who bartered in the marketplaces. In Ancient Greece, where the present English word 'economy' originated, many people were bond slaves of t he 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 conqu erors raised venture capital (from ventura, ital.; risk) to finance their captur es. The capital should be refunded by the goods they would bring up in the New W orld. Merchants such as Jakob Fugger (1459 1525) and Giovanni di Bicci de' Medici (1360 1428) founded the first banks.[citation needed] The discoveries of Marco Pol o (1254 1324),[dubious discuss] Christopher Columbus (1451 1506) and Vasco da Gama ( 1469 1524) led to a first global economy. The first enterprises were trading estab lishments. In 1513 the first stock exchange was founded in Antwerpen. Economy at the time meant primarily trade. Early modern times[edit]