Jamshid Damooei, PhD
Financial Markets and Economic Stability & Growth…..Continued
Most economies around the world rely principally upon markets to carry out the complex task of allocating scarce resources
Markets also distribute income by rewarding superior producers with increased profits, higher wages, and other economic benefits.
There are essentially three types of markets within the global economic system.
The factor markets allocate factors of production (land, labor, skills, capital) and distribute income (wages, rent) to the owners of productive resources.
Consuming units use most of their income from factor markets to purchase goods and services in the product markets.
The financial markets channel savings to those individuals and institutions needing more funds for spending than are provided by their current incomes.