What’s the difference between ‘economic’ and ‘economical’?

The words economic and economical are often confused by English learners and used interchangeably. In fact, these words are quite different in meaning.

economic

The adjective economic is related to the economy:

an economic theory
economic growth
an economic recession
an economic adviser

Economic also means ‘financially efficient’, in other words how profitable or financially rewarding something is:

It is no longer economic to have two offices.

economical

We use the adjective economical when we say that something does not waste time, money, resources, effort, etc.

For example, a car that does not use up a lot of fuel can be described as an economical car.

Other examples of economical:
an economical heating system
She is very economical when she goes shopping.