How does the economy work?

To learn basics of economy, click here.

An economy is a financial ecosystem of a region or country, generated based on the production, distribution, exchange, and consumption of goods and services inside it. In a healthy economy, inflation and unemployment remain in balance.

In this system, the economy is regulated by the government to some extent in sectors such as transport, defence, public services, etc. It provides private businesses with the freedom to operate with minimal oversight. Hence, both the public and private sectors can co-exist in one economy. The best examples to consider for this type of mixed economy are India and France.

Bottom line

The economy is a massive word and can’t be understood easily. However, if you are able to comprehend its core functionalities, it will become interesting for you.