What is Economy
The balanced state of a nation or territory in terms of its production and consumption of goods and services, in line with the flow of money is called an economy.
To describe the larger set of economy, the interconnected data of production, use, and trade of services can be referred. It aids in determining how produced resources are distributed across the region. The manufacturing, consumption, and trade of goods and services are used to fulfill the needs of those residing and working within the economy. This cycle is termed as Economic System.
An economy comprises all movements related to the manufacturing, consumption, and distribution of goods and services in an area. These orders are decided by the combination of market activities and group or hierarchical decision-making. The participants of this process include everyone. Groups such as families, corporations, authorities, and even individuals participate in this process. The governance of the economy or a particular region is assessed by its customs, regulations, backgrounds, and geology, among other factors, and its development and steep are determined by the actions and activities of its participants. Therefore, this is the only reason two economies cannot be identical.
Amid the surge of COVID-19 cases across the world and its waves causing the havoc, economy has to pay the price. The balanced state of every nation has seen abruptions across every sector. The Real estate sector, Airlines, Constructions, Mines and Automobile sector and many more registered huge loss in their production because of lack of demand. Whereas Healthcare sector, Food grains and Medical equipment producers’ recorded jump.
This is known as Market-based economy, where people and companies freely exchange goods through the market, dependent upon two factors supply and demand. As an example, United States is a major example of a market-based economy where consumers and producers decide what’s sold and manufactured. Yielders own what they make and determine their prices, while consumers constrain what they buy. They pick the service of those goods only that falls under their budget or bid on how much they’re willing to pay for the proposed cost by the yielders.
As a result, the cost in one sector for an industry lifts due to demand, the money, and labor needed to satisfy that demand transfer to those places where they’re required. The growing economy reflects the state of wealth and jobs in a country. The mechanism of supply and demand requires manpower to operate it. While the world tussled with COVID led pandemic, it not only caused interim shutdown of market, but unemployment also surged.
The Purpose of Economy
The need of an economy is to maintain the household; to manufacture and exchange food, water, and other assets and goods majorly for sustaining human life.
To run an economy requires a rational manager who can take care of the whole region such as a country. There are authorities set up to deal with the world economy. They are named as World Bank, World Trade Organization, International Monetary Fund, and G7 (rich countries).
In today’s time, many countries are experiencing recession. It is calculated by the percentage of Gross Domestic Product, or the value of production of goods and services in a country. Amid the COVID led pandemic, numerous industrial sectors had to keep themselves contracted without a choice.
Notwithstanding, the creation of various successful vaccinations to cure COVID-19, Industrial sectors can only hope for their recovery. There confirmed stance in market like their previous stages is unlikely to be confirmed in other one or two years.
It is sure that vaccination drives have unleashed hopes for the market recovery, but the new variants and emerging waves still pose the concern for couple of years.
What is Economy