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Understanding How The Economy Works

How The Economy Works

The Economy may seem complex but it is actually quite simple. Whether we’re discussing a local economy, a national economy, or a global economy, it is all about how money is generated and spent in a certain region. In other words, this covers the quantity of money moving around the economy, where (or with whom) it is accumulating, and the patterns influencing how money travels around an economy.

The simplicity of understanding how the economy works comes from learning about it this way: The Economy is like a machine with parts. These parts are simple and they move by the repetition of transactions. 

 Any Economy has the three core elements:

  • Buyers/Sellers
  • Transactions ( the settlement of a purchase of goods or services between a seller and a buyer) 
  • Markets (a category of Buyer/Seller transactions, i.e. Oil, Wheat, Car, Stock, Gold, etc.)

You now have all you need to know to understand the basic workings of the Economy (aka The Economic Machine).

In addition, we recommend that you watch the video “How The Economic Machine Works by Ray Dailo“. It will be a great learning experience, guaranteed!

How The Economic Machine Works



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