Economic means to do with money – money usually comes from the jobs that people or countries do. Most countries start off poor and slowly change to become richer. They do this by changing the types of work that the people who live there do. Sometimes this process is called Economic Development.
Richer countries are sometimes called MEDC’s which stands for More Economically Developed Countries. Wales is a good example of an MEDC - we live in one of the worlds wealthiest countries and we have high standards of living. The USA is sometimes thought of as the best example of an MEDC.
The poorest countries are sometimes called LEDC’s which stands for Less Economically Developed Countries (though the United Nations sometimes uses LLEDC (Least Less Economically Developed Countries for the very poorest) most of these are in Sub-Saharan Africa.
Some countries which were LLEDC’s have developed during the last 50 years some countries went through this process in the 1960’ and 1970’s and are called NIC’s (Newly Industrialised Countries) while some of them only really started in the past ten years or so; these are called RIC’s (Recently Industrialising Countries). South Korea is a good example of an NIC and India and China are good examples of RIC’s. China is sometimes also called a FCC but Russia would be a better example. FCC stands for Former Communist Country meaning that it used to have an economy (all of the work) which was run by the government to make money and provide jobs for everyone. Now the economy is run by individuals to try and make money.
Capitalism is a way of running the economy of a country where individuals are allowed to run businesses to make money for themselves (the government takes a share in taxes). The idea is that these individuals are more motivated so create bigger businesses and more jobs in order to make more profit.
Communism is a way of running the economy of a country where the government runs all work in a country to try and make money and create jobs for everyone. Sometimes this is called a Centrally Planned Economy.