An 

eco nomy (fr
om  Anc i
ent Gr eek 
οἰκονομία ( oikonomí a) '
ma nage ment of a
hous ehol d, adminis t
rati
on'
; from οἶκος (oîkos) 
'
household'
,
and νέ μω  (
némō) '
distri
bute, al
locate'
) i
s a
n area of
the produc ti
on, 
dis
tributi
on and trade, as we l
l
as 
c ons umption 
of goods and services
 bydiffere
nta gents.I
nge ne r
a l
,itisdefine
d'a sa
socialdoma i
nt hate mpha si
zet hepr a
c t
ices,discourses,andma terialexpre
ssions
associa tedwi t
ht hepr oduction,us e,a nd ma nageme ntofr es
our ces'
.[
1] 
A gi ven
economy i sa s e tofpr oc essest hati nvolve
si tsc ul
tur e,va lues,e ducat
ion,
technol ogicalevolution,history,s ocia
lor ganizat
ion,pol i
tica lstructureandl egal
systems ,aswe l
lasi t
sge ography,na tur
alre s
ourcee ndowme nt,ande cology,asma in
factors.

Thesefact
orsgi
vec ont
ext,cont
ent
,andse tt
hecondi
tionsa
ndpara
me t
ersi
nwhi
chan
economyf unct
ions
.I notherwor ds
,thee conomicdoma i
nisas oci
aldoma
inof
i
nterre
lat
edhuma npract
icesandtr
ansac
tionst
hatdoesnots
tanda
lone.

Economicagentsc anbei ndividual

s,businesses
,or ga
nizat
ions,orgove rnment
s.
Economictr
ansac
tionsoc
c urwhent wogroupsorpa rt
iesagre
etotheva l
ueorpric
eof
t
het r
ansa
ctedgoodors e
rvice,commonlye xpr e
ssedinac ert
ain 
cur
rency.However,
monetar
ytra
nsact
ionsonlyaccountforasma llpar
tofthee c
onomicdoma in.

Economi cact
ivit
yi ss pur
redbypr oduct
ionwhi chus e
snatura
lresource
s,la
borand
capit
al.Itha sc ha nge d overt i
meduet o te
chnology,
 i
nnovat
ion (
new produc
ts,
servi
ces,process
es,e xpandingma rket
s,di vers
ifi
cati
onofma r
kets,nic
hema rke
ts,
incre
asesrevenuef unc ti
ons)s uchas,t
ha twhi chproducesint
ell
ectua
lproper
tyand
changesin 
indust
rialr elat
ions 
(mostnotably chi
ldlabor 
bei
ngreplacedinsomepart
s
ofthewor l
dwi t
h unive rsa
la cc
e s
stoeducation).

A market-based e conomy 
is one whe re goods a
nd ser
vices 
are pr oduced a nd
exchangeda c
c or
dingto 
demand and supply 
be t
we enpa r
ti
c i
pants(economica gents
)
by 
barter
 ora  me di
um ofe xc
ha nge 
wi t
ha  
credi
t or
 debi
t val
ue acc
eptedwi thi
nt he
net
wor k,s ucha sauni tofc urre
nc y.A  c
omma nd-base
de conomy isonewhe re
pol
iti
calage ntsdire
ctl
ycont
rolwha tisproduc edandhowi tissoldanddi st
ri
buted.