The economy encompasses all the ways that people and businesses make, use, trade and exchange money, goods, services and information. It includes all the production of goods and their distribution and can be local, regional or global in scope. Economy is a social domain influenced by culture, values, education, technological evolution, history, political structure, legal systems and natural resources.
A country’s balance of trade (or net export-to-import ratio) is a key economic indicator. A positive balance means the country is exporting more than it’s importing, while a negative balance suggests the country is importing more than it’s exporting.
Modern economists trace their roots back to ancient Greece, notably Aristotle’s writings on household management (“oikonomia”). But the modern study of economy really took off in 18th-century Europe. This was the time when mercantilism (from mercado, lat.: merchant) emerged as a way to intermediate between private wealth and public interest, and the first Secretaries of State for Economy were appointed in European nations.
The era of colonization and the opening of the triangular trade routes also helped shape the economy. These new economic routes brought more workers to cities, where they specialized in their craft and traded to different markets. This further expanded the economy and introduced new economic factors like supply and demand, cost of production and the role of government regulation.
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