When we talk about the economy, there are many things that come to mind. Companies, workers, jobs, unemployment, goods, wages, sales, investments, consumers, trade, money, production, energy, oil. But what constitutes “the economy”?
The term economy is used to describe the actors that engage in economic activities. These are millions of businesses of different sizes, many more millions of citizens and also the states in which they operate. Each of these actors has one or more functions that are described in the so-called circular flow of the economy. In the economy, most citizens have two roles. As employees, we help to produce goods and services. Our second role is defined in our ability to consume goods and services. We are consumers. In these roles, we can influence economic activity.
Economic activity is the interaction of the aforementioned actors. This includes, for example, investments, provision of manpower, production activities, trade and especially consumerism, the utilisation or consumption of what is being produced.
This interaction can create good or bad results. Sometimes there are good results for all, sometimes the results are good only for some actors, while bad for others. In other cases there are bad results for all.