We find different people engaged in different activities to earn their living. These activities are concerned with the production and exchange of good and services. Farmers, workers, shop-keepers, manufacturers, teachers, doctor, lawyers, chartered accountants, etc. performs their own piece of work.
All of us are concerned with one or the other activity to earn certain sum of money, so that we can meet the necessities of our own and other members of our family. All those activities which are paid are called economic activities. These activities produce goods and services which satisfy human wants.
Economy consists of all agricultural, industrial, manufacturing, construction, mining, business and other productive activities.
It also includes services in private institutions and government departments. Professionals like doctors, lawyers, singers, nurses and managers etc. are also the members of economy. Every activity which has economic motive constitutes part of economy.
Goods and services produced by the individuals of the country. The national income indicates the standard of living of the people. In developed economies, the sum total of goods and services produced is very large, so their income and standard of living is higher. In backward economies, large number of hands remain idle and resources unexploited, so their output of goods and services is lesser. Their income is low and standard of living is poor.