An economy is the system that a society uses to produce, distribute, and consume goods and services. It involves various activities, such as farming, manufacturing, and selling, which help meet the needs and wants of people. Economies can be large, like those of countries, or small, like local communities. Different types of economies exist, including capitalism, where businesses are privately owned, and socialism, where the government plays a larger role in managing resources. The health of an economy is often measured by indicators like GDP (Gross Domestic Product) and employment rates, which show how well it is functioning.