At first glance, the title seems complicated.
But I do my best to simplify so that anyone can understand how this affects people like you and me.
In every economy – regardless of country difference, there are 5 major key players involved.
What they think and do has huge effects on us as a society.
We have the government, financial institutions, firms, households and the rest of the world.
1. Government
First, we have the government elected by citizens to provide for them and improve their standards of living.
Now in order to do that, the government needs the corporation of everybody to work on building and growing our economy.
As well as resources.
Speaking of resources, the government can either raise revenue through taxes or borrowing from financial institutions.
Especially on infrastructure, creating relevant policies, employing staff as in 3 key E components that shaped our economy.
They are education, employment, enterprise, healthcare, housing and transportation.
All these played an important role in shaping our economy, personal and financial development as citizens and a united country.
2. Financial Institutions
The second key players are financial institutions.
As in banks, insurance and investment companies who are dealing with money on day-to-day transactions of deposits, financing, fund transfers, loans, trading and withdrawals.
3. Firms
The third key players are firms.
As in landlords, corporations, small-medium enterprises and businesses.
They are responsible for creating jobs, homes, offices, facilities and businesses.
4. Households
The fourth key players are households
As in civilians living in apartments and houses.
They have their bank accounts and are dependent on financial institutions, government assistance and firms to survive and thrive.
5. Rest Of The World
Finally, we have the rest of the world who are responsible for importing goods and services into the country.
As well as investing in the economy through setting up businesses, creating jobs for civilians and enhancing other areas such as entertainment and sports.
With that said, this is what our economy comprises of
If any of these 5 key players are affected, the other 4 will also be affected.
Which will have huge implications on our society and nation as a whole.
You can also watch my video version on this article below.
