What is Market In The General Sense?
The stock exchange is a big market for capital turnover and the correct setting of prices for goods, securities and currency. Exchange is a money market for states, enterprises, firms, associations and corporations. It acts as an intermediary between those who are looking to invest capital and those who need it, that is, regulates credit, money, payment relations both in the country of placement and between states.
The economic essence of exchanges is that it is a market of substitute values; has a specific organization; the participants of the stock trading realize their own profit through it; official quotation is made; quoted specific stock commodity is possible; it serves as an insurance company for price and exchange rate risks; gives a digital expression of supply and demand; places goods and financial instruments in space and time; it establishes objective prices and rates.
The exchange performs the organizational function, develops exchange contracts, deals with disputes between members of the exchange, quotes exchange rates and rates, has a hedge function, provides settlements and clearing on stock exchanges, distributes information on the dynamics of price changes.
What is a market in the general sense? In many scientific sources there is a detailed interpretation of this economic category. Thus, the English economist Jevons defined the market as a group of people who entered into business relations and entered into agreements on the sale and purchase of goods. Famous American economist F. Kotler characterizes the market as a set of existing and potential buyers of goods, emphasizing the special role of buyers. The British Encyclopedia treats the market as a set of tools that provides the basis for the exchange of goods and services as a result of bargaining between buyers and sellers.
At the same time, in the developed countries, the market has a well-defined set of common features, which makes it possible to judge the degree of market relations. Therefore, first of all, we will find out all that reveals the signs of the market in order to trace how they are further manifested in stock trading. So what is the market? In the everyday sense, the market is a bazaar. In the best case, the market should be understood as a combination of supply and demand, or as a place where the sale of goods takes place. Such definitions reflect the features of the market lying on the surface of phenomena. But they do not reveal the intrinsic properties of the market as an economic phenomenon and are not sufficiently constructive to understand its role in the economic system. In fact, the concept of “market” is much broader and it is difficult to determine its content in any one wording. However, one can choose from many definitions the ones that occur most often in domestic and foreign literature. In our opinion, they most clearly reflect the multifaceted nature and role of the market.
The market, firstly, should be understood as the place where the sale and sale of the results of human activity takes place, and therefore, as the sphere of entrepreneurial activity – business. That is, it refers not only to the sale of goods, but also about other results of people’s activities, such as intellectual, financial and credit (borrowed capital, securities, etc.). The subject of sale is also information. Second, the market – a set of economic relations between people in the field of exchange, through which the implementation of the results of human activity. In this aspect, the market serves as an economic category. Thirdly, the market is a place where the final recognition of society embodied in the results of labor activity takes place.
All in all, the modern market can be described as a complex and multi-faceted mechanism, relations in which are formed depending on the characteristics, degree of development, level of maturity, historical and social customs of different countries.