Introduction:- The term economic comes from the ancient Greek word oikonomia means ‘management of a household’. The term economic process refers to those activities, through which goods and services aimed at satisfying human needs, are produced distributed, and used. Economic includes the study of labor, land investment of capital, income, and production, and taxes and government expenditures. Adam Smith regarded as the Father of Economics, defines Economics as “the science relating to the laws of production, distribution, and exchange”.

Branches of Economics:- The two chief branches of economics are as follow:

Micro Economics – It examines the behavior of basic elements in the economy including individual agents, such as households and firms, or as buyers and sellers and market and their interactions.

Macro Economics – It studies the economy as a whole and its features like national income, unemployment, poverty, the balance of payments, and inflation. It deals with the formulation of models explaining the relationship between factors such as consumption, inflation, savings, investment, national income, and finance.

Economy:- It represents production, distribution, or trade and consumption of goods and services in a given geographical area by different agents which can be individuals, businesses, organizations, or governments. The study of the economy of any country helps us to find out the financial condition of the population as well as the different working sectors of the economy.

A modern economy is a complex machine. Its job is to allocate limited resources and distribute output among a large number of agents mainly individuals, firms, and governments allowing for the possibility that each agent’s action can directly or indirectly affect another agent’s actions. There are two major types of economies they are:

Open Economy: It belongs to a market economy, which is mainly free from trade obstructions and where exports and imports comprise a lush large percentage of the GDP. No economy is absolute whether open or closed in terms of trade restraints and all governments have fluctuating levels of control over the activities of capital and exchange.

The degree of the vulnerability of an economy determines a government’s freedom to pursue monetary policies of its choice and the exposure of the country to the international economic cycles.

Closed Economy- An economy in which no exercise is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goals of such an economy are to furnish consumers with everything that they need from within the economy’s perimeters.

The degree of exposure of an economy is decided by their respective governments by using policy controls like tariffs, import, and export quotas, and exchange rate limits. In india, since independence, the government has played a major role in planning economic activities.

Present status of the Indian economy: Indian economy is the world’s 6th largest economy or nominal GDP basis and the 3rd largest by Purchasing Power Party (PPP) in 2017. According to CSO, the growth in GDP during 2017-2018 is estimated at 6.5% as compared to the growth rate of 7.1% in 2016-17.