An economy is a system of making and trading things of value. It is usually divided into goods (physical things) and services (things done by people). It assumes there is medium of exchange, which in the modern world is a system of finance. This makes trade possible. The alternative – systems of barter – exists only on a very small scale.
To better understand how the economy works, it can be discussed in three sections. These are:
- The primary sector which covers raw products from farming, fishing, and mining, and so on.
- The secondary sector which covers manufacturing of goods.
- The tertiary sector which covers a range of services, provided to people and companies.
The term 'real economy' is sometimes used to mean the part of the economy concerned with goods and services. This is contrasted with the 'paper economy', the financial side of the economy, which buys and sells on the financial markets.
The word 'economy' comes from the Greek word οἰκονόμος. This means "person who manages the house".