The concept of "economy" was introduced by Aristotle in the III century BC, however, the formation of the economy as a science took place only in the XII-XIII centuries, simultaneously with the birth of capitalism.
Economics, the definition of which was given by many scientists, eventually became one of the basic sciences. Almost everyone faces it, because few have ever been to stores and markets. So this complex and multifaceted science - economics - entered the everyday world imperceptibly.
The definition that is used most often in reference books is as follows: this is the science of economic and industrial activity and the movement of its results between economic entities. The sphere of interests of the economy is great: trends in prices, the labor market, government regulation, cash flows, the usefulness of goods and services, competition and competitiveness, commodity-money relations, satisfaction of needs, etc. In addition, one of the important parts of studying economic theory is the global economy.
The definition of the world economy is as follows: a set of national economies of the world and the relations between them. Thus, the world economy also includes international trade, and the exchange of resources, as well as other economic relations that arise between countries: economic and customs unions, international labor migration, etc.
The economy, the definition of which is given above, by most economists is divided into two large components: micro and macroeconomics. As you might guess, microeconomics studies economic processes to the scale of an intersectoral level, and macroeconomics at the country level.
The main task of the economy is to determine how to most effectively meet unlimited needs in the face of limited resources. History knows many methods proposed by eminent scientists aimed at solving this problem.
Often there are 3 ways of doing business at the country level: command-administrative, mixed and, finally, a market economy. Determining which method is used in a given country is not so difficult. The command and administrative economy is often applied in totalitarian states, when the government clearly regulates and controls the distribution
e resources: goods, services, labor, and also sets hard prices. Most often, this method is ineffective. The market economy, on the contrary, acts completely freely, the state only observes and slightly regulates the emerging distortions. A mixed economy combines the previous 2 methods with varying degrees of efficiency.
The determination of equilibrium prices in a market economy occurs automatically, based on supply and demand, and competition also affects prices. Since consumers are driven by the desire to buy high-quality goods at the lowest possible price, and sellers want to sell the goods at the highest price, in the end, the price is set at an average level that satisfies both sellers and buyers. The market economy is self-regulatory, therefore, it is considered the most effective way of managing the economy and has received the greatest distribution in the world.
