All private households, small and large companies and enterprises as well as institutions of a state together form the national economy. Put simply, one can say that everyone who produces, distributes and consumes goods belongs to the national economy.
Important for the economy
Two important characteristics of an economy are the common currency and a common economic system. The government’s economic policy, the education of the population, the state of the art, the economic performance of the people, the climate and natural resources such as coal, iron ore and oil deposits play a major role in the national economy. The geographical location of a country is also important. For example, if there are large ports by the sea, you can easily transport goods around the world. All of these things work together to ultimately determine how well an economy performs.