An economy can be defined as a rather large set of different inter-related consumption, exchange, and production activities that help in determining how scarce resources will be allocated. The distribution, consumption as well as production of services and goods are utilized for fulfilling the requirements of the people that are living as well as operating within the particular economy. This is often referred to as a system of economy. 

Different types of economy

Economies can be classified into several types. All the different types of economies have been outlined in the following. 

  • Economies based on market: Economies based on the market allow businesses and individuals to exchange goods freely within the market, based on demand and supply. In this context, it should be mentioned that the US is a market economy. Here consumers and producers together decide what’s produced and what’s sold
  • Economies of the pure market: This type of economy is very scarce as they involve some central planning or government intervention. Public education, regulation, and benefits of social security are given by the government to overcome the gaps of the market economy thereby creating balance 
  • Economies based on companies: These are often seen to be depending on a political central agent that controls goods distribution and prices of goods. In this economy demand and supply cannot naturally play out as it is planned centrally. Hence imbalance is common

National Economy

The national economy can be defined as the entire country’s economy. The national economy involves management as well as financial resources. It helps in encompassing the value of all services and goods manufactured throughout the nation. Adam Smith, a well-known economist, defined the term national economy in the middle of the 18th century based on some key concepts. These core concepts include demand and supply, labor division, and competition (that determines the value of services and goods). The utilization of these elements is done to assess the economic condition of nations. It is often seen that national economies are being discussed concerning their total national product. This refers to the predicted value of the production throughout the country through its nationals within the boundaries of the nation. It also refers to the overall domestic product that is the predicted worth of the production throughout the country by its citizens. 

Lifelines of the national economy

A well-established transportation and communication system plays a vital role in the building of a prosperous nation. There are several benefits in making sure that the development of highly advanced system communication and transportation within a country as they help in not only connecting varied states and regions along with people through the proper network but also highly contribute to the overall economy of the nation. Broadly stating there are four lifelines of the national economy. These are Transportation, Communication, International Trade and Tourism in the form of trade. This has been discussed in the following.

Transport – The different transportation systems throughout India have been outlined in the following: 

  • Roadways: India contains one of the largest road networks throughout the world with a total of about 2.3 million roads
  • Railway: Railway is the chief mode of transport for passengers as well as freight throughout India
  • Pipeline: The concept of pipeline network is relatively new in India but is slowly developing
  • Waterways: Waterways can easily be regarded as the cheapest mode of transport that is mostly used for carrying bulky and heavy goods
  • Airways: Airways is the most comfortable, prestigious, and fastest mode of transport and it was nationalized throughout India in 1953

Communication – Communication is essential of two types namely Mass communication involving newspapers, magazines, radio television, etc, and Personal communication including postcards, telegrams, letters, emails, and telephones. One of the largest telecom networks throughout Asia is present in India.

International Trade – The exchange of different products or goods within people that occurs across countries or states is known as trade. International trade can occur through any transportation mode.

Tourism in the form of trade – The arrival of foreign tourists within a country is a form of trade. This directly contributes to the economy of a country. 

Conclusion

Throughout the article, the topic that has been discussed is the Nation’s Economy. Careful assessment of the economy of a nation is important to ensure the long-term growth of the nation. Under the chief topic of a nation’s economy, the subtopics that have been discussed include different types of economy, National economy, and its lifelines.