Economy Began as Household Management
An economy is a system of production and exchange. The Greek word underneath means running a house, and the thrifty sense of the word never left.
The economy is the whole machinery by which goods and services are made, sold and used. Its Greek ancestor, *oikonomia*, means the management of a household — one house scaled up to a country. The older sense of thrift survives too: flying economy, or writing with an economy of words.
- A country's system of production and trade. *The economy grew last quarter.*
- Careful use of resources. *An economy of effort.*
- The cheapest class of travel. *Booked in economy.*
- Economies — savings made. *The council found economies.*
Word forms
| Form | Word | Example |
|---|---|---|
| Noun | economy | A strong economy. |
| Plural | economies | Emerging economies. |
| Adjective | economic | Economic growth. |
| Adjective | economical | An economical car. |
| Noun | economics | She studied economics. |
How it is used in a sentence
- The economy is expected to grow slowly this year.With the, it means a country's whole economy.
- Buying in bulk gives economies of scale.A fixed term: costs per unit fall as volume rises.
- There is a real economy of style in her writing.The thrift sense, applied to words instead of money.
Economic or economical?
- Economic — to do with the economy (*economic policy*)
- Economical — thrifty, using little (*an economical engine*)
- Economics — the academic subject
- Economist — someone who studies it
- Economise — cut back on spending
From Greek *oikonomia*, household management, from *oikos* (house) and *nomos* (law, management). English first used it for domestic thrift; the national sense grew in the eighteenth century, alongside the subject that studies it.
Economic or economical?
Economic is about the economy; economical is about saving money. An economic crisis is national; an economical car is cheap to run.
What are economies of scale?
The savings that come from producing more: fixed costs are spread across more units, so each one costs less.