Economy - Explanation and definition of economy

What is economy

Economy is defined as the science that studies the ways to proceed to the administration and management of limited available resources in order to obtain goods or services that meet the needs of individuals or organizations.

There are many definitions about the concept of economy, we have chosen this definition because of the simplicity and in turn to the vast amount of information involved it, we will better understand the concept of economy analyzing word for word each of the phrases in the above definition.

We define economy as a science or branch of human thought which by exposing one or more theories we can predict the behaviour of the object under study, for example, the physics of the planets is the science that relaying on a theory predicts future moves will have a planet under certain conditions, polymer chemistry is the science that relying on a theory predicts the behaviour and composition of the polymers based on molecules or basic compounds, so we have that economy as science has to rely on some theory to predict the behaviour of human or organizational needs in order to satisfy them.

Depending on the theory on which it is based economy born the various schools or economic thoughts, which have been practiced throughout history and countries by economy policies, so we find economy theories such as mercantilism, metallism, physiocracy, monetarism, marxism, capitalism, etc...

The economy includes the processes of extraction and production of raw materials, processing and production as well as marketing and distribution of products and services using limited resources. The main feature of the economy is that it has limited resources, if resources were unlimited, there would be no economy as we know it given that our needs would be met instantly without any effort, would you need money if you had a lamp with a wonderful genius grant you any desire instantly?, this seems attractive but thanks to the economy humans need to strive and develop under an environment of limited resources, this has led us to work, research, develop and innovate, thanks of our efforts we have probes and robots in space, cure diseases, we can travel great distances quickly, etc ...

The science of economy is divided into two main branches;

• Microeconomics

• Macroeconomics