Economic System Definition

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In the economic system there is always talk about money, and credit. As the saying goes in this system “one man profit is another man income.” So basically the money that a person spend can be someone else money for rent, mortgage, or bills. In the economic system there are also things and places called firms, stock market, and corporate governance.
A firm is business organization, responsible company or partnership that sells goods or services to make a profit. The word firm is usually connected to law, but the word can be used widely or business operation units, like accounting. The firm usually use with business or enterprise. There are different types of firms.
One type of firm that exist is sole proprietorship. Sole proprietorship
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Partnership is a business owned by two or more people. Partnership is similar to sole proprietorship because, each owner in the partnership are all responsible for all business duties. Responsible for all business duties means that if something wrong with the business or any meeting or work that include the business, than all owners of the business are held responsible, and they own everything that belongs to the business. In a partnership there is no limit to how many people can have ownership in the business. One example of partnership is a hotel. In this hotel there are four owner of it, so it is a partnership. Each owner have an equal amount of share for the hotel to each one have about 25% each. Each person own 25% of the hotel and all of them are responsible for…show more content…
The Stock Market is a market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. It is also known as equity market. The stock market makes it possible to grow small amount of money into larger amount of money. It also a person to become wealthy without taking the risk of starting a business. The Stock Market makes the fear of sacrifices that frequently accompany a high-paying career go away.
Corporate governance is another thing that happens in economic. Corporate governance is the system of rules, performs and developments that a company is focused and well-organized. Corporate governance basically includes complementary the interests of the many stakeholders in a company. The Corporate governance include the shareholders, management, clients, traders, financiers, government and the community.
For people to make money they would have to take risk. When people like to own a house they would have to pay mortgage and there are different types of mortgage safe, be okay and risk. The mortgager that are safe are the people that will paid there mortgage on time. The be okay are the people will pay the bill but maybe late from time to time and the risk are the people that that have a hard time paying the
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