Understanding the economic and financial world

Money has become the main pillar of all global activities. Starting with taking control of the human mentality, from the economy to the global equilibrium.

Understanding the economy

Economic science can be described as the study of the processes of distribution, profit, exchange and consumption of wealth. On the other hand, how to fill the gaps of infinite humans in a world where resources are naturally finite. The world is now facing so many challenges and surprisingly it has been proposed to many potentials and promises. Man at the service of the economy when it is the economy that must be in man’s favour. From military conflicts to economic war, the economic consequences and history of the Second World War, the exposure of a world demography, integration, solidarity and social exclusion, globalization, technology revolution, uncontrolled natural disasters, ecological problems, inequality between rich and not poor countries and so much more.

The world of finance

It has two types of financing, direct financing (linking the lender and the borrower through capital) and indirect financing (between the lenders and the borrower, there is an intermediary). A capital market is the area of issuing and trading securities, including contracts and transactions. It has the new or primary market, which is fictitious, i.e. its existence is unclear and it is communicated through banks. Then there are the stock markets or second-hand market or secondary market. The traders in this type of market are the brokerage firms and it is according to supply and demand that prices are locked in. In addition, the listing of functions has changed at the European stock exchange from fixing to listing on the market. Stock market indices reflect the development of securities trading. Otherwise, the money market is the segment of the capital exchange through which short charges are exchanged for liquidity and which constitutes a benchmark for the implementation of monetary policy. European stock market indices have become important mechanisms for portfolio management and serve as a carry-over.

Economic financing

The various economic agents require financing linked to their economic activity. The economic movement requires large amounts of capital because companies have to pay for their investments. On the other hand, the State also has a serious need for financing to cover budget deficits. The financing of households has changed, investments on savings accounts have largely weakened to the privilege of investments in securities and life insurance. The financing problem of public states corresponds to the budget deficit. Three phenomena have explained it since the 1970s, including recession, inflation and policies .

In order to shift the monetary constraint, finance has a crucial function over time. For this reason, its processes are important in keeping an economy on its growth path.