Final answer:
An economy is a system in which people produce, sell, and buy things. Markets, driven by demand and supply, play a primary role in determining what is produced, how it is produced, and for whom it is produced.
Step-by-step explanation:
An economy is a system in which people produce, sell, and buy things. It is the social institution through which a society's resources (goods and services) are managed. In an economy, markets, which are driven by the forces of demand and supply, play a primary role in determining what is produced, how it is produced, and for whom it is produced.
For example, under capitalism, individuals and businesses own the means of production and freely compete in the market to produce and sell goods and services. Prices and wages are determined by supply and demand. In contrast, under socialism, the means of production are commonly owned, and the government centrally controls the economy.
Overall, an economy is a complex system that involves various economic actors, such as consumers, producers, and governments, interacting in markets to allocate resources and determine the production and distribution of goods and services.