Basic Understanding Of Capital Market

In an economy, the financial market is broadly classified into two – money market and capital market. The capital market deals only in financial instrument or commodities that have more than one year of maturity and are long-term securities.  The capital market is totally different from the currency market or money market even though it performs certain functions just like the money market.  The common thread between both the markets is that it offers a link between the wealth creators and investors.  One of the biggest differences both the market is that introduction of the automated trading robots in the currency market. There are many renowned robots that have been introduced in these markets especially in the digital currency market. Ethereum code is an example of these robots.  Continue reading about these robots here to enhance your knowledge in this field.

More insight into capital market

The capital market’s important function is that it offers ease of transaction to both organizations and the investors.  Both the parties can find each other quite easily in this market and all the legal aspects too will be taken care of smoothly.

The capital market is divided majorly into two markets- primary market and secondary market.

Primary market- the Primary market is the most important type among the capital market.  This is also known as the new issue market. It only deals with issuing of new securities. It means these securities will be issued for the first time to the investors. Primary market’s main function is the capital formation of companies, governments, etc.  The companies raise additional fund to expand their existing organization or to start a new project.  The organizations raise this money through issuing shares, debentures, bonds, preference shares, etc.

Secondary market- It is also known as a stock exchange or stock market.  Here the securities like bonds, shares, debentures, etc are sold and bought by the investors.  The main difference between these two markets is that in the case of the primary market, only the new securities will get issued whereas, in the secondary market, only the existing securities get traded. There will be no fresh issue here in the secondary market. The securities get traded in legalized and highly regularized stock market which follows strict rules and regulations.  It ensures that all the investor can trade in this market without getting cheated.  The investors can trade in their shares during the trading time with the help of a licensed broker.

 

 

A Country And It’s Economics

When we say economic growth what it usually means is that the way in which the economy is progressing or how advanced it is becoming. We can describe economic growth as the rise in the potential of the economy for the production of necessary materials and the resources and all this should be completed in the given time frame. When it comes to economic growth in economics, we speak that in reference to satisfying the needs of the people within the society and to satisfy these needs there is the necessity of expanding the possible production of the economy which should be for long-term. If the economic growth of any country is encouraged it will have a positive effect on the income of the country nationally. Not only this but there will positively effect on the employment levels of the country, therefore increasing the standard of living of that country.

Another advantage of sustained economic growth is that there will be stimulation of finances of the governing body by increasing revenues of the tax. When the revenues of the tax increases they governing body will be able to make more money which will further used to develop the economy of the country. There is a way of measuring how a particular country is growing economically and whether it is growing positively or not but just comparing the levels of Gross National Product of the current year with the past year’s Gross National Product. Every country must make sure to analyze what are the strong and weak points of that country because this will help in the economic growth of that country. It also a good idea to analyze any software used for trading continue reading here.

Advantages of Analyzing

  • By doing analysis we can have a look into the essential factors of the economy of the country.
  • By doing analysis we can systematically determine the most favorable use of all the resources that the country is lacking in.
  • Selection of an alternative way that will best suit in achieving the goal set for economic growth.
  • Analysing economy will help in the assessment of what is causing problems for growing economically like:
  1. Economic instability
  2. Depression
  3. Inflation

There are various variables that are considered in economic analysis like, the demand of the society, what is being supplied, the price of the products and services needed, what it will cost for producing these products, payments made, number of laborers required and the capital of the country.