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system consisting of the production, distribution or trade, and consumption of limited goods and services by different agents in a given area

An economy is a system of making and trading things of value. It is usually divided into goods (physical things) and services (things done by people). It assumes there is medium of exchange, which in the modern world is a system of finance. This makes trade possible. The alternative – systems of barter – exists only on a very small scale.

To better understand how the economy works, it can be discussed in three sections. These are:

The term 'real economy' is sometimes used to mean the part of the economy concerned with goods and services. This is contrasted with the 'paper economy', the financial side of the economy, which buys and sells on the financial markets.[1][2][3][4]

The word 'economy' comes from the Greek word οἰκονόμος. This means "person who manages the house".

Related pagesEdit


  1. Meanwhile, in the real economy, Wall Street Journal, July 23, 2009
  2. Bank regulation should serve real economy, Wall Street Journal, October 24, 2011
  3. "Real economy" definition in the Financial Times Lexicon
  4. "Real economy" definition in the Economic Glossary