Just as a financial planner would tell you that a diversified financial portfolio is a stronger than a undiversified one, so too is a diversified economy generally stronger than an undiversified one. In fact, there is a geography to how economic type is distributed across the world, which we will talk about below. Nearly all economies have elements of each of the types above, albeit in vastly different proportions. Those of you reading this that have earned money babysitting or housesitting have likely participated in the informal economy. For instance, shoe shining, street performances, and window washing at stop lights are examples of economic activities that tend to fall with in the informal economy–rarely do people who engage in these activities get protections employees do (in theory) in the formal economy, nor is their compensation for services subject to taxes. Other terms for the informal economic sector is under-the-table or the black market. In addition to these 4 types, there is also the informal economy, which refers to activities that happen outside of any formal regulations. knowledge) examples: education, information-technology, research and development manufacturing) examples: automobile assembly, textile manufacturing extractive) examples: agriculture, mining One way to describe the economy of a place–a city, a country, or an entire world region–is by classifying its economy into types: Economic geography is often oriented around issues and questions of development, which refers to the processes of increasing the wealth and quality of life within a country.īut before we talk about development, let’s pause and learn some ways to describe economy and economic development. The field of economic geography concerns itself with the often unevenly distributed spatial dimensions of economic structure and type, resources, and general activities of production and consumption. The etymology of the word reveals that its first meaning was “ household management” but has since grown to signify the presence and use of “ wealth and resources of a country.” Colloquially, economy is often used to mean how a person or a country makes money and supports a livelihood. A word that we hear and use all the time, but what exactly does it mean?
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