How the Economic Machine Works: “A Transactions-Based Approach”
A transaction consists of the buyer giving money (or credit) to a seller and the seller giving a good, a service or a
financial asset to the buyer in exchange. A market consists of all the buyers and sellers making exchanges for
the same things – e.g., the wheat market consists of different people making different transactions for different
reasons over time. An economy consists of all of the transactions in all of its markets. So, while seemingly
complex, an economy is really just a zillion simple things working together, which makes it look more complex
than it really is.