Economy encompasses all the resources (natural, human, and manufactured) and activities necessary to support the people, businesses, organizations, and governments in a given area. Economic activities are based on the laws of supply and demand, with total production influenced by the decisions of consumers to purchase goods or services in exchange for money. Economic growth can be triggered by many factors, including: increasing consumer demand, improvements in labor efficiency or technology that allow businesses to produce more with less labor and capital, and increased production from the discovery of new natural resources such as petroleum fuel.
Man is innately inclined to practice economy, to spend as little of his own energy and ingenuity as possible in order to gain as much of what he wants as possible. In a world where he has only a limited number of ways to provide for his needs, he saves and conserves, devises devices that reduce the amount of sweat required to produce a certain quantity of products, and trades to obtain those things which he does not have himself.
It is this activity that constitutes a given economy, whether it be a village, a city, or a nation. The study of economies is called economics, and there are a wide variety of theories which can be applied to explain their workings, their limitations, and the effects of different variables. The two main branches of economics are microeconomics and macroeconomics. Microeconomics focuses on the individual decisions of consumers and producers, while macroeconomics explains the workings of a given economy as a whole.