Define Market System in Economics

Market System

An essential condition for economic growth is the establishment of a market in a developing country

Have a perfect system. The perfect market system (System Market Perfect) means:

There are plenty of buyers in the market.

There should be plenty of sellers in the market.

Prices are set by elasticity of supply and demand.

The birth agents are moving.

The quality of the goods is excellent.

There are substitutes for things.

None of the perpetrators, consumers, or salesmen are exploited.

There should be no shortage or shortage of goods.

Resources are being allocated at cost. In a country where the market system is equipped with these features, the resources are better will be able to dedicate to better purposes. Appropriate resource allocation provides impetus for economic growth. Its banks have often noticed that in many countries the market system is devoid of the above characteristics.

There are many flaws in the market system. Trade instead of buying and selling freely from a country

And the birth of monopolies, merchants, religious leaders and other classes in the fields of wealth that led to economic development through jihad. The campaign can be headed.

Capital supply

Factories and manufacturing establishments are essential for economic growth. These institutions do not come into being without capital can therefore, the provision of capital becomes a necessity. To calculate the required amount of capital, keep in mind the output capital ratio. Falls. The rate of capital and production means that is to increase production by one percent what other percentage of capital is required for this? If an additional Rs. 30 is required to increase the value of Rs. 10 in production, it will be said that the rate of capital and production is 10:30 by 1: 3. If in the presence of this rate a country makes a program of at least 5% economic growth. So that would mean that it would need 15% capital for this 5% increase in production. If 15% capital can be accumulated in this country, then the target of 5% economic growth will be easily achieved. But if the child rate in the country is not 15%, then you have to rely on many other resources to provide the required capital.

In case of non-availability of required capital, the additional sources to be relied upon are as follows.

(i) Wealth reduction

(ii) Promotion of savings

(iii) Increase in taxes

(iv) Debt from the people

(v) Reduction in imports

(vi) Encouragement of exports

(vii) Inflation

(viii) Use of foreign investment

(ix) Dependence on external loans

Using all of these measures will provide the country with the money it needs to invest. Not all of these measures are equally important in terms of their impact. The potential implications of raising funds through the above methods should be assessed. This is not only possible in the poorest societies of wealth, but in less developed economies this path can be relied upon. Just to reduce wealth items are only press enforced.

The way to raise taxes on capital supply is always open to governments. However, it must be observed that the burden of taxes should not exceed the means of the people and their implementation should increase the productive capacity of the people. The money of the people which is filled in small amounts in different places, can be collected in the form of loans and put to work. Borrowing from the public is easy, but repaying it is a bit painful. Lots of money can be saved by discouraging the import of luxuries and non-essential items or by imposing heavy taxes on their imports or setting quotas etc. Such donations can be used for economic development projects.

By improving the quality of exported goods, keeping prices reasonable and finding new markets, any country can boost exports. In this way, external resources will be available that can be used for economic development.

Some governments also adopt the method of inflation for economic growth. Governments are asking their central bank to issue new notes to address capital shortages. Garzi's new publication raises the issue of inflation, but also provides capital for economic growth. To alleviate the shortage of capital, investors from outside the world are invited to invest at home. With the arrival of foreign capital, the problem of shortage of capital disappears, but the abomination in this regard is that foreign companies take out profits. Governments also try to overcome domestic capital shortages by borrowing directly from other governments. External loans are being used for economic growth everywhere but they have to pay high interest rates.

Investment opportunities

One of the conditions for rapid economic growth is that there are many opportunities to use capital in this country. Investment opportunities depend on two things.

Other evils include raw materials, labor supply, working class manhood, mobility and technology availability. If the interventions with which capital has to work are missing, then the chances of capital consumption disappear. In such a situation, the provision of multi-capital became useless. And investment opportunities also depend on the balance of payments. If the government is determined to correct the balance of payments, the investment will be profitable, otherwise the scope for investment will be limited. If the government intends to set up factories that will either increase the volume of exports or create alternatives to imports, there will certainly be vast potential for investment in such an environment. And when investment opportunities abound, not only domestic but also foreign investors will take steps to take advantage of these opportunities. Thanks to both types of investors, factories and enterprises will emerge and economic growth will be successful.