An economy can be defined as the representation of the total rupee value of all goods and services produced over a specific time period, which is often referred to as the size of the economy. The gross domestic product (GDP) is one of the main indicators that are used to measure the country's economic growth.
An economy encompasses all activities related to production, consumption and trade of goods and services in an area. An economy applies to everyone from individuals to entities such as corporations and governments. The economy of a particular region or country is governed by its culture, laws, history, and geography, among other factors, and it evolves due to necessity. For this reason, no two economies are the same.
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An Economy can be broadly classified into three categories. Listed below are the types of economies and their features:
· Market-based economy: This is a kind of economy that allows goods to flow freely across the market depending on the supply and demand. It is an economic system in which production and prices are determined by unrestricted competition between privately owned businesses.
· Command-based economy: A command-based economy is a system where the government, rather than the free market, determines what goods should be produced, how much should be produced and the price at which the goods are offered for sale. It also determines investments and income. The command economy is a key feature of any communist society.
· Green economies: this is a type of economy that depends on renewable and sustainable forms of energy. The aim of these economies is to cut down the carbon emissions, restoring biodiversity, relying on alternative energy sources and generally preserving the environment.
A market economy is a kind of economic set-up where the greater part of production, distribution, and exchange is controlled by individuals and privately owned corporations. In this type of economy, the government does not participate in the above mentioned activities and thus the government’s interference in the market is minimal. In a market economy, the price and production is controlled by buyers and sellers freely conducting business. Given below are the characteristics of market economy:
The following points highlight certain important aspects of the Indian economy and its current position:
An Economy is the system of production, distribution and consumption. Economy can be a developed one with the efficient use of available resources. We can use our resources efficiently with the better knowledge of economy and finances.
Many of us have a misconception that economy means only Business, Stock markets, Banks and those who are involved in commercial activities. But economy includes business, sentiments, emotions and many other hidden things which you all have experienced in different ways and in different situations. One economy can be totally imbalanced from the emotions and sentiments of the people. My dear Readers an efficient and a developed economy include the following :
If we follow above said points, we can successfully build an "economy of effort".
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