Economy signified the organisation and operation of economic activities in a region for the satisfaction of human wants. Economy could be of a village, of a district, of a country etc. When we study the activities of an economy, we mainly study the production, consumption and distribution of goods and services.
The economy of a village is a simple economy. Goods and services are produced for self consumption and not for market. The basic objective of the people living in a village is to satisfy the current needs. A school teacher, a farmer, a labourer are the examples of the residents of a village. Each individual uses his own resources to fulfill his needs. Virtually there is no specialization. Exchange of goods and services takes place to enable people to fulfil their needs. For example, a teacher with his income may buy goods and services he needs.