It has existed for centuries. It is an invention of civilization

A market is a place or situation where a buyer and seller communicate with each other and undertake an exchange, although they do not need to meet in person. Auctions, door-to-door sales, mail-order sales, retail shops, flea market stalls, telephone sales, home demonstrations, mobile shops, internet shopping websites and sales through brokers or agents are all examples of markets. There exist several types of markets for exchange between producers and consumers: the goods and services market, resources market, money market, foreign exchange market, etc.

In this unit, we look into 2 types of markets and related operations and strategies: the stock market and the forex market. The former refers to the organized trading of securities through various exchanges and through the over-the-counter market. A stock exchange is a specific form of a stock market, a physical location where stocks and bonds are bought and sold, such as the New York Stock Exchange, NASDAQ or American Stock Exchange. The latter is the market where one currency is traded for another. It is one of the largest markets in the world. By some estimates, about $2 trillion worth of currency changes hands every day.

(Sources: http://open-site.org/Society/Economics/Markets;
www.state.il.us/treas/Education/Glossary.htm)

There are four main types of markets:

· Goods and services market: This is the most common type of market and is where producers provide consumers with goods and services in exchange for consumer spending as payment.

· Resources market: This is where natural, capital and human resources, or factors of production, are exchanged for income. For example:

o The household sector provides human resources in the form of labor in exchange for wages and entrepreneurship in exchange for profit.

o The financial sector provides capital resources in the form of capital investment, which will be invested in capital goods, methods and processes, in exchange for interest.

o The household and producer sectors provide natural resources in the form land in exchange for rent.

• Domestic money market: This is the market for money. Supply of money within an economy usually remains equal. Financial institutions loan from households and producers for interest and then loan this on to other households and producers at a higher interest rate.

· Foreign exchange market: This involves the exchange between two different currencies. A currency can depreciate or appreciate in relation to another currency.

(Source: http://open-site.org/Society/Economics/Markets)