What drives the market economy?

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Bam-Bam

What drives the market economy?

hockey2525

Quite simply it is supply and demand. What this means is you are offering a product and everybody wants it you can raise your price, however the opposite is also true, if you are offering a product and nobody wants it you will have to lower your price. The housing market has been a great example of this. A year ago when demand was high (especially in specifi areas) the price of houses kept rising to a point where many people paid prices that they may not be able to resell for many years. Recently as the demand for houses prices of houses have declined. You may think your house is worth $X, but it is only worth what someone else is willing to pay for it.

Stas K

Competition of independent producers for consumers

msmith7811

Supply and demand.

Mathew C

Private capital or financial capital and human capital with technonology and property rights drive the Market economy. Incentives do create the momentum.

Edward Hyde

It is a circle of interlated factors. Start with sales of items produced. This produces profit for the producer. This profit may be partly reinvested by the producing company. This increases ability to increase the number of output products available for future sale along with production from current resources.
This reinvestment also produces purchases of labor, machiney, supplies and other needs requiired for increasing productive capacity. Profits not so reinvested are paid out as dividends to stockholders. The stockholders may use these dividends to purchase goods and services from other producers. Also they may use some of their dividends to purchase more shares of stock, either in the company that paid the dividends or in other companies that produce other goods and services.
Each of these functions is a driver of the whole economy. Each depends on the other factors while also generating support for the other factors.

ibooyah2006

Well, a number of factors drives the economy. The first and foremost is the consumer. The consumer is responsible for consuming the product/services that is cranked out. This is why the consumer confidence level is so important. The other fact is interest rates. Interest rates is used by the Feds to control inflation. The higher the interest rate, the less likely we spend as the cost of borrowing increases.. See http://ibooyah.com investment matters for these types of articles.

833tg

Supply and Demand

Frank Castle

Greed.

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