A society's economy is the system that governs how goods and services are produced and exchanged among members. Although the metrics used to describe an economy are calculated by using money, the economy of a country, region or locality, reflects the moral, cultural and political choices of that society.PARoss Services: More Than Money
Market Economy
A society that permits the principles of supply and demand to determine the production and pricing of goods and services, is said to have a market economy.Investopedia: Economics Basics: Demand and Supply
Planned Economy
If the production, distribution and consumption of resources are centrally managed by a government or government agency, a society is said to have a planned economy.
Mixed Economy
Most countries today have a mixed economy, where some aspects are managed by free market principles, and others have restrictions placed on them by the government. For example, a country may choose to centrally manage health care, while allowing consumer goods to be governed by market forces.
Key Metrics
- GDP: Gross Domestic Product
- GNP: Gross National Product
- CPI: Consumer Price Index
Head of the GAO Comments on the Future of the U.S. Economy
In this video, David Walker, head of the United States Government Accountability Office, offers his views on the long-term outlook for the U.S. economy. Walker voices concerns over how the baby boomer generation will impose great pressures through draws on Social Security and Medicaid upon the U.S. economy, threatening its very sustainability.
References
Fast Facts
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Fact:
Term economy comes from a Greek word meaning to manage a householdOikos: Why Oikos?
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Largest economy, 2007
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Smallest economy
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United States rank, 2007
