The national economy is a system of reproduction that has developed in the course of historical development throughout the country, which is a whole complex of interrelated industries and industries that belong to a particular state.
From the point of view of macroeconomic theory, the national economy includes four macroeconomic entities: households, the business sector, the public sector and the foreign sector.
The household sector is formed by factors of production that are privately owned, the proceeds from the sale of these factors are used for consumption and savings. This sector seeks to achieve maximum consumption and lowest costs for it.
The business sector, which is a set of private firms in the country that have a demand for factors of production, forms a supply of goods and services, makes investments. This sector in its activities seeks to maximize entrepreneurial profit.
The public sector aims to create public goods (security, science, infrastructure services). He also seeks to profit and creates the conditions for the best functioning of the country's economy.
The foreign sector is a combination of foreign state institutions and entities outside the borders of a country. His condition indicates the balance of payments and exchange rate.
All sectors are in interaction. Through the market of factors of production, households receive factors of production (land, capital, entrepreneurship, labor). Then, through the goods market to households, the business sector receives tangible as well as intangible benefits. The movement of all real flows of resources and finished products is simultaneously accompanied by cash flows moving towards them.
State management of the economy involves the direct participation of the state in all of these processes. It accumulates taxes from households and firms, while at the same time providing transfers and subsidies.
The national economy is often understood as the national economy of a country. It is inextricably linked and stands in unity in the exchange, production, distribution, consumption of services, goods and values.
The national economy is a product of the development of society. Signs of a national economy are: a common economic space; single legislation, monetary unit, general monetary system and financial system; close ties between business entities with a national reproduction contour; territorial certainty with a single economic center, which has a regulatory and coordinating role.
Each subject of the national economy has its own economic interests. Their coordination is carried out through the action of objective economic laws.
The national economy strives for efficiency, stability, justice through important measures, such as ensuring the growth of national production, striving for the existence of a maximum level of employment, a stable level of prices and maintaining a balanced external balance, which is ensured by public administration in the economic sphere. In this direction, government agencies operate through the use of various instruments of macroeconomic regulation: fiscal, monetary, foreign economic and income management policies.
The main goal of the national economy is an increase in national economic wealth, the most efficient use of limited resources, and an increase in the volume of profitable production of goods and services.