Final answer:
The digital economy includes components like digital commerce, digital business, and digital society, and offers efficiency and new opportunities. However, it also raises concerns such as the digital divide and security issues.
Step-by-step explanation:
The digital economy is a broad term that encompasses various components. It includes digital commerce, which is the buying and selling of goods and services using the Internet, mobile networks, and commerce infrastructure. Another component is digital business, which is the use of data as a critical asset to make business decisions, in production and in interaction with customers and suppliers. Additionally, there is digital society, where technology impacts the way we interact, learn, and engage.
The merits of the digital economy include increased efficiency, lower costs due to digital distribution, the creation of new markets and opportunities, and the facilitation of global trade. Moreover, digital economies enable better information management and analytics.
However, the digital economy has its demerits, such as the digital divide, which is the gap between those who have easy access to the Internet and those who do not. This can lead to unequal opportunities in education and employment. Security issues like identity theft and loss of privacy are also prevalent in the digital economy.