Economy what does it mean

Word of the Day have a heart of gold. Blog Outsets and onsets! Read More. November 08, To top. Sign up for free and get access to exclusive content:. Free word lists and quizzes from Cambridge. Tools to create your own word lists and quizzes. Word lists shared by our community of dictionary fans. Sign up now or Log in. Definitions Clear explanations of natural written and spoken English. Click on the arrows to change the translation direction. Follow us. Choose a dictionary.

Clear explanations of natural written and spoken English. Usage explanations of natural written and spoken English. Grammar Thesaurus. Word Lists. Choose your language. My word lists. Because consumer spending represents more than two-thirds of GDP, this report is very useful to gauge the economy's general direction. Also, because the report's data is based on the previous month sales, it is a timely indicator. The content in the retail sales report can cause above normal volatility in the market, and information in the report can also be used to gauge inflationary pressures that affect Fed rates.

The industrial production report, released monthly by the Federal Reserve, reports on the changes in the production of factories, mines, and utilities in the U. One of the closely watched measures included in this report is the capacity utilization ratio , which estimates the portion of productive capacity that is being used rather than standing idle in the economy. The Bureau of Labor Statistics BLS releases employment data in a report called the non-farm payrolls , on the first Friday of each month.

Likewise, potential contractions may be imminent if significant decreases occur. While these are general trends, it is important to consider the current position of the economy. For example, strong employment data could cause a currency to appreciate if the country has recently been through economic troubles because the growth could be a sign of economic health and recovery.

Conversely, in an overheated economy, high employment can also lead to inflation, which in this situation could move the currency downward. The Consumer Price Index CPI , also issued by the BLS, measures the level of retail price changes the costs that consumers pay and is the benchmark for measuring inflation. Using a basket that is representative of the goods and services in the economy, the CPI compares the price changes month after month and year after year.

Greater-than-expected price increases are considered a sign of inflation, which will likely cause the underlying currency to depreciate. Societies have organized their resources in many different ways through history, deciding how to use available means to achieve individual and common ends.

In primitive agrarian societies, people tend to self-produce all of their needs and wants at the level of the household or tribe. Families and tribes would build their own dwellings, grow their own crops, hunt their own game, fashion their own clothes, bake their own bread, etc. This economic system is defined by very little division of labor and resulting low productivity , a high degree of vertical integration of production processes within the household or village for what goods are produced, and relationship based reciprocal exchange within and between families or tribes rather than market transactions.

In such a primitive society, the concepts of private property and decision-making over resources often apply at a more collective level of familial or tribal ownership of productive resources and wealth in common. Later, as civilizations developed, economies based on production by social class emerged, such as feudalism and slavery.

Slavery involved production by enslaved individuals who lacked personal freedom or rights and were treated as the property of their owner.

Feudalism was a system where a class of nobility, known as lords, owned all of the lands and leased out small parcels to peasants to farm, with peasants handing over much of their production to the lord. In return, the lord offered the peasants relative safety and security, including a place to live and food to eat. Capitalism emerged with the advent of industrialization. Capitalism is defined as a system of production whereby business owners entrepreneurs or capitalists organize productive resources including tools, workers, and raw materials to produce goods for sale in order to make a profit and not for personal consumption.

In capitalism, workers are hired in return for wages, owners of land and natural resources are paid rents or royalties for the use of the resources, and the owners of previously created wealth are paid interest to forgo the use of some of their wealth so that the entrepreneurs can borrow it to pay wages and rents and purchase tools for hired workers to use.

Entrepreneurs apply their best judgement of future economic conditions to decide what goods to produce, and are earn a profit if they decide well or suffer losses if they judge poorly. This system of market prices, profit, and loss as the selection mechanism as to who will decide how resources are allocated for production is what defines a capitalist economy. These roles workers, resource owners, capitalists, and entrepreneurs represent functions in the capitalist economy and not separate or mutually exclusive classes of people.

Individuals typically fulfill different roles with respect to different economic transactions, relationships, organizations, and contracts which they are a party to. This may even occur within a single context, such as a employee-owned co-op where the workers are also the entrepreneurs or a small business owner-operator who self-finances his firm out of personal savings and operates out of a home office, and thus acts as simultaneously as entrepreneur, capitalist, land owner, and worker.

The United States and much of the developed world today can be described as broadly capitalist market economies. Socialism is a form of cooperative production economy. Economic socialism is a system of production where there is limited or hybrid private ownership of the means of production or other types of productive property and a system of prices, profits, and losses is not the sole determinant used to establish who engages in production, what to produce and how to produce it.

Segments of society band together to share these functions. Production decisions are made through a collective decision making process, and within the economy some but not all economic functions are shared by all. These might include any strategic economic functions that effect all citizens. These are often paid for through income or use taxes levied on the remaining tactically independent economic functions individual citizens, independent businesses, foreign trade partners, etc.

Modern socialism contains certain elements of capitalism, such as a market mechanism, and also some centralized control over some resources. Essential Meaning of economy. An increase in tourism will help the city's economy. We must learn to practice economy. Mass production creates economies of scale. Full Definition of economy Entry 1 of 2. Definition of economy Entry 2 of 2. Examples of economy in a Sentence Noun The war altered the country's economy.

We'll also benefit from the economies provided by more efficient energy sources. It would be false economy to repair the leak without replacing the pipe. First Known Use of economy Noun 15th century, in the meaning defined at sense 4 Adjective , in the meaning defined above.

An orderly management or arrangement of parts; organization or system. The economy of the human body. Frugal use of resources. Economical or inexpensive to buy or use. An economy car; an economy motel. The management of the income, expenditures, etc.

The system of production and distribution and consumption. The overall measure of a currency system; as the national economy. Efficient, sparing, or conservative use.