Functions and Roles of the Financial System in the Global Economy参考.ppt

Functions and Roles of the Financial System in the Global Economy ? Learning Objectives ? To understand the functions performed and the roles played by the system of financial markets and institutions in the global economy. To explore several key terms and concepts of the money and capital markets. To discover how important the financial system is in increasing our standard of living, generating new jobs, and building our savings to meet tomorrow’s financial needs. Introduction The financial system is the collection of markets, institutions, laws, regulations, and techniques through which bonds, stocks, and other securities are traded, interest rates are determined, and financial services are produced and delivered around the world. Introduction The primary task of the financial system is to move scarce loanable funds from those who save to those who borrow to buy goods and services and to make investments in new equipment and facilities, so that the global economy can grow and the standard of living can increase. Flows within the Global Economic System The basic function of the economic system is to allocate scarce resources – land, labor, management skill, and capital – to produce the goods and services needed by society. The global economy generates a flow of production in return for a flow of payments. The circular flow of production and income is interdependent and never ending. Flows within the Global Economic System Flows within the Global Economic System The Role of Markets in the Global Economic System In most economies around the world, markets carry out the complex task of allocating resources and producing goods and services. The marketplace determines what goods and services will be produced and in what quantities through their prices. Markets also distribute income by rewarding superior producers with increased profits, higher wages, and other economic benefits. Types of Markets There are essentially three types of markets within the global economic sy