1.1 What is an economy?

The economy in which you live affects almost every aspect of your life including your education, future employment, and products/services you consume.

But what is an economy?

An economy is basically a complex set of interactions as shown in the graphic below.

A Venn diagram. Households. Businesses. Government. Banks. Financial Institutions.

What is an economy?

Timing: 6 minutes

Watch this short video by the Reserve Bank of Australia. As you watch the video, pay close attention to the role of banks. You will learn that banks enable households and businesses to borrow and lend money.

You will have an opportunity to do a short quiz based on this video at the end of the session.

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Please note that the video above is produced by the Reserve Bank of Australia, which is the central bank of Australia, and the emphasis is on the Australian economy.

However, in terms of the key sectors mentioned in the video, the UK economy is very similar to the Australian economy. The central bank in the United Kingdom is called the Bank of England.

The role of the Bank of England: Money

Timing: 3 minutes

Watch this short video to learn more about the Bank of England.

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Learning outcomes

1.2 Young adults and the UK economy