How Does the Economy Work?

Yellow Browser
Yellow Browser

Written by DEPKES.ORG March 2023

Understanding how the economy works can be challenging, but it is essential for making informed decisions about personal finance, investing and public policy.

The economy is influenced by a wide range of factors, including macroeconomic factors like government policies, interest rates and international trade, as well as microeconomic factors such as individual decisions about spending and saving.

Factors that influence the economy

The economy comprises three primary components: households, businesses and government. Each of these components plays a vital role in the economy and interacts with the others in complex ways.

Components of the economy

Several economic indicators are used to measure the health of the economy. These indicators provide insight into the level of economic activity, and can help individuals and policymakers make informed decisions.

Economic indicators

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