Subjects of a market economy or business entities (economic agents) - actors in the economy who independently make decisions and carry out economic actions.

The main subjects of economic activity in a market economy are:

households;

enterprises or business organizations;

· state.

This division of subjects, in essence, reflects the two main areas of economic activity of people. Household- a generalized element of the consumer sphere of the economy. Its main function in the economy is the consumption of final products and services.

households- this is the economic image of an average family that maintains a separate household, owns joint property, receives a common income and has an average stable structure of expenses, is a convenient structural unit in describing the economic life of society. They strive to maximize the utility of the goods they acquire: they rank their needs and carry out expenses within the disposable amount of income.

Enterprises and the state are structural elements of the second main sphere of human activity in the field of economics - the sphere of business activity.

It is through this area that households receive income.

State(government institutions) are, as a rule, non-profit budgetary organizations that implement the functions government controlled country and regulation of the economy at various levels from the national to the local.

The goal of the state as an economic entity is to ensure a stable economic order and economic development countries.

Enterprises or business organizations are mainly private firms of various economic status - from individual to large joint-stock companies.

Business - it is any kind of direct activity for the purpose of generating income, involving the attraction of own funds, or indirect participation in such activity by investing in a business equity. In this sense, being an employee in a government agency or being employed by a company is not a business, but owning shares or running your own gas station is a business.

Business offers complete independence in making business decisions and appropriate responsibility for the results of these decisions.

The main function of business organizations is the production of the entire mass of goods and services and bringing them to the consumer. Their goal is to maximize profits.

The given structure of economic entities reflects not separate spheres of people's participation in social production, but the distribution of each member of society in various spheres of economic life.

Market economy is an economy based on commodity-money relations, domination private property and free competition between producers and consumers. Currently, the market economy is one of the main types economic systems. Main economic decisions taken independently by producers and consumers. The former, at their own peril and risk, decide what products to produce, in what quantity, by means of what technique and for whom. The latter independently make a choice of which products to purchase and from which manufacturers. The choice is made under the influence of factors such as price, quality, etc. The balance of the economy is achieved through the market mechanism. Its main elements are supply and demand. Taking into account their compliance, the price of products is formed. The price level is a signal to increase or decrease their productivity. The market economy was formed in the XVIII century. and is the most flexible economic system, which, under the influence of internal and external factors, tends to transform and change.

Subjects of the market economy:

1) household - an economic unit consisting of one or more persons;

2) enterprise - an economic unit that: uses factors of production for the manufacture of any product; makes decisions independently; strives for maximum profit;

3) bank - a financial and credit institution that regulates the movement of the money supply necessary for the normal functioning of the economy;

4) the state - represented by legal institutions, exercises political and legal power in order to control the market in order to meet public needs.

TO economic resources of a market economy include:

1) labor in the form of a conscious activity of people aimed at creating a product that they or other people need;

2) Natural resources in the form of land, water, air, minerals, flora and fauna, natural energy sources involved by people in economic circulation;

3) means of production in the form of fixed and working capital used in business activities;

4) funds for which and with the help of which material, material and labor resources are acquired, attracted;

5) information resources in the form of scientific, technical, design, technological, statistical, management information and other types of spiritual and intellectual values ​​necessary to create an economic product used in the process of its creation.

3. Market: essence, classification, functions. Market Efficiency

Market- is a collection economic relations based on mutual agreement between market entities regarding the transfer of ownership of goods or the possibility of receiving services. Usually occurs in the form of an equivalent exchange for money (trade) or other goods (barter). With free access to the market, both producers and consumers, the exchange takes place in a competitive environment.

Hence, the market as an economic category is a set of specific economic relations and ties between buyers and sellers, as well as intermediaries regarding the movement of goods and money, reflecting the economic interests of subjects of market relations and ensuring the exchange of labor products. The unity of all the above categories lies in the fact that they express a single essence- economic relations between people in the process of movement of goods.

Market classification:

1. On a territorial basis: local, regional, national, global.

According to the subjects entering into the exchange: the market of consumers, producers, resellers, government agencies.

2. By objects of exchange: markets for means of production, markets for goods and services, financial markets, and intellectual property markets.

3. Taking into account the assortment: closed, saturated, mixed.

4. According to the degree of compliance with the law: legal (official), illegal (shadow).

5. According to the degree of saturation: equilibrium (demand = supply), scarce (demand > supply), excess (demand< предложение)

6. According to the degree of development of economic freedom: free, regulated.

Market Functions determined by the tasks ahead of him:

1) pricing (equivalent) - the price is formed on the market based on the interaction of supply and demand, taking into account competition;

2) informational - the market provides its participants with information about the required quantity of goods and services, their range and quality;

3) stimulating - the market encourages producers to create the economic benefits that society needs at the lowest cost and receive sufficient profit.

4) distributive - the incomes received by market entities are mainly payments for the factors of production that they possess.

5) intermediary - the market acts as an intermediary between the producer and the consumer.

Most efficient market mechanism operates in conditions of free, or perfect competition, that is, when the market situation is characterized by a multitude of buyers and sellers, homogeneity of the products sold, and free access of firms to the market. Under perfect competition, none of the sellers or buyers by itself is able to influence the market price.

Market mechanism with a high degree efficiency solves the problem of producing goods and services needed by consumers. Through the market there is a spontaneous adaptation of the volume and structure of production to the volume and structure of social needs, the distribution of factors of production between various industries, that is, the question is decided what and how much to produce. The market economy, in principle (with some very rare exceptions), does not know such phenomena traditional for the command-administrative system as shortages, shortages of goods, queues, etc.

There are quite a lot of subjects of the market economy. These are producers and consumers, entrepreneurs and employees, industrialists, bankers, merchants, owners of loan capital and valuable papers etc. In the most general form, the subjects of a market economy are combined into three large groups.

Let's consider them separately.

households	How do owners of factors offer labor, land, capital in the resource market; receive income from the sale of resources; use income to purchase consumer physical goods and services to meet personal needs
Entrepreneurs	Demand for resources; offer tangible goods and services both for the business and public sectors (investment tangible goods and productive services) and for households (consumer tangible and intangible goods); invest their earnings
State	Presents a demand for economic resources for the implementation of activities in the public sector of the economy; offers money; offers public goods without direct payment or with partial payment, which positively affects the productivity of the business sector and reduces the cost of household consumption; carries out government regulation of the market economy

Main interaction factors:

1. Costs

2. Cash income

3. Goods and services

4. Labor and capital

5. Resources

6. Labor and capital

7. Consumer spending

8. Goods and services

9. Expenses

10. Resources

11. Goods and services

12. Consumer spending

13. Goods and services

14. Taxes

15. Goods and services

Conclusion: households, as owners of resources, sell resources to firms, and already as consumers, they spend money income on the proceeds from resources, buy goods and services on the product market. Firms buy inputs to produce goods and services, then sell the finished product of their production to households in exchange for profits. The profit is used to buy additional resources to ensure the circulation. As a result, there is a real flow of economic resources, final products and services, and a cash flow in the form of income and consumer spending. These streams are simultaneous and repetitive.

Household as a subject of market relations

A household is an economic unit of one or more people. It ensures the production and reproduction of capital. It independently makes decisions in the consumer market, is the owner of any factor of production (land, capital, labor). Strives to meet your needs as best as possible. Households, in addition to families, can also be called organizations that are engaged in production (church, trade union, party).

The household is one of the three subjects of economic activity. Household covers economic objects and processes occurring where a person or family permanently resides.

The household is interpreted as an economic unit that consists of one or more persons united by a common budget and place of residence, supplies the economy with resources and uses the money received for them to purchase goods and services that satisfy the material needs of a person. The concept of a household unites all consumers, employees, owners of large and small capital, land, means of production, persons employed and unemployed in social production.

In general, a household can be characterized as an independent economic unit, consisting of one or more people who have some kind of production resource and strive to satisfy their needs to the fullest extent possible.

The main characteristics of a household:

Cohabitation and home improvement.

Joint farming.

Possession of certain resources.

Independence in making business decisions.

Striving for maximum satisfaction of needs.

Household types

Single households or simply households.

Single households are formed by singles, separate or several families, as well as these families together with singles. Single households in the Russian Federation include 139 million households. people, which is 94% of the total population of the country.

group households.

Group households are formed by permanent or temporary groups of people for the joint organization and arrangement of their lives in various hostels and boarding schools, in soldiers' barracks, cells of monasteries and barracks of correctional labor institutions. They unite 9 million in the Russian Federation. people, or 6% of the total population of the country.

Households are classified according to the following criteria:

Territorial and regional affiliation (area, region of the country, natural and climatic zone, etc.).

Demographic characteristics (family and non-family households, number of household members, gender and age characteristics).

Property characteristics (nature of housing, number of rooms, availability of a car, dacha, land plot and so on.).

Income characteristics (average per capita income, income group, sources of income, etc.).

Economic characteristics (employment, industry, sector of the economy, type of enterprise, position, etc.).

Labor potential (number of able-bodied people, level of education, professional training, etc.).

The social status of the household (determined by the head of the family or the family member with the highest income).

To characterize an economic entity, it is required to indicate the source and amount of its income, the direction and amount of its expenses.

Household is property, money, tools used by people at home. It covers the economic processes taking place in the place of life of people, families.

Household income is private income. They are formed by:

wages, labor, owner's profit, capital, interest and dividend, participation in a joint-stock company, rent, natural resources.

Each household's income is spent in three ways:

Payment of taxes to the state

Satisfaction of personal needs

Formation of personal savings

Savings is the post-tax non-consumable portion of a household's annual personal income. Distinguish the following types savings:

Household (in cash)

institutional ( bank deposits, insurance policies, bonds, stocks, etc.):

a) "protective" - ​​actions to preserve the original purchasing power of a given amount of money. They perform the role of self-insurance against unpredictable circumstances.

b) "speculative" - ​​actions to multiply the purchasing power of a given amount of money. They play the role of a kind of "family business" according to the rules of a market economy.

In general, savings is a deferred demand for real goods (goods and services), and this "deferred" turns savings into a permanent "sword of Damocles" hanging over the market economy, i.e.:

A relative increase in savings (as personal income rises) means a relative decrease in the demand for consumer goods and services, which can cause a reduction in the production of these goods and an increase in unemployment (unemployment).

The preponderance of "home" savings can undermine the country's economy, so it is necessary to stimulate institutional savings, i.e. the participation of money in the circulation (economy) of the country.

Consumer spending is that part of personal income that irrevocably and without interest goes to producers.

And among the objects of consumer spending can be identified:

Non-durable goods (term - less than a year)

Durable goods (term - more than a year)

The household is one of the most important market institutions. The role of households in the development of market relations is relatively large and is determined by the following points:

First, households provide the necessary level of consumer demand, without which the functioning of the market mechanism is impossible.

Secondly, household savings are a source of savings and investment, which is very important in a developing economy.

Thirdly, households are the subjects of supply in the market for factors of production (entrepreneurial ability and labor).

Fourthly, it is the household that is the basis for the formation of production and sale human capital.

Fifth, the ability of households to establish a family business contributes not only to the growth of personal well-being, but also to the development of a market economy as a whole.

In a market economy, the entire mass of resources constitutes the aggregate resource market, which, in turn, consists of many markets for specific resources. The owners of these resources are considered mainly households.

Ministry of Education and Science Russian Federation

Federal State Autonomous Educational

Institution of Higher Professional Education

"National Research Technological University "MISiS"

Institute of Economics and Management of Industrial Enterprises

Department of Business Informatics and Production Management Systems

Market: its essence, functions, structure.

Direction of training 080500 BUSINESS INFORMATICS

Training profile (program name): ENTERPRISE ARCHITECTURE

Qualification (degree) bachelor

Performed by student gr. MP-15-3

M. S. Solovieva

Checked by M. N. Volkov

Moscow 2016

Introduction. 3

1.1 The essence of the market. 4

1.2 Functions of the market. 6

1.3 Market structure. 7

2 Economic subjects of market economy. eleven

Conclusion. 15

List of used sources. 16

Introduction

In the history of mankind, two general forms of organizing economic life are known - subsistence and commodity economy. Historically, subsistence farming was the first to appear (primitive community, slave-owning and feudal estates, peasant farming). Social economic basis market economy is commodity production.

Commodity production originated 7-8 thousand years ago during the period of decomposition of the archaic economy and the emergence of agriculture as a result of the division of labor, since it requires exchange. Initially, the exchange was carried out in the form of barter, for the development of the division of labor, the exchange became widespread in the so-called slave-owning and feudal societies, and acquired a universal character with the development of mass machine production.

The entire history of economic civilization testifies that the market has been and remains the core of the market mechanism of any society. The market system is a historically established order, an unconscious system of communication between economic entities in the process of exchanging the results of their work.

The common features of commodity production are: private ownership of factors of production, a market mechanism for regulating economic activity based on economic competition, the presence of many freely operating economic agents of communication.

Market

The Essence of the Market

In its most general form, a market is a system of economic relations that develop in the process of production, circulation and distribution of goods, as well as the movement of funds. The market develops along with the development of commodity production, involving in the exchange not only manufactured products, but also products that are not the result of labor (land, wild forest). Under the dominance of market relations, all relations of people in society are covered by buying and selling.

More specifically, the market represents the sphere of exchange (circulation), in which there is a connection between the agents of social production in the form of purchase and sale, that is, the connection between producers and consumers, production and consumption.

The subjects of the market are sellers and buyers. Households (consisting of one or more persons), firms (enterprises), and the state act as sellers and buyers. Most market participants act both as buyers and sellers. All economic entities closely interact in the market, forming an interconnected “flow” of purchase and sale.

The objects of the market are goods and money. The goods are not only manufactured products, but also factors of production (land, labor, capital), services. Everything as money financial resources, the most important of which is money itself.

The market as an independent entity includes three main elements: the market for goods and services, the labor market, and the capital market. All these three markets are organically interconnected and influence each other. The development of the market and market relations depends on the development of all its components.

The most important condition for the emergence of the market is the social division of labor. Through the division of labor, an exchange of activities is achieved, as a result of which the worker of a certain type of specific labor gets the opportunity to use the products of any other specific type of labor.

An equally important condition for the emergence of a market is specialization. Specialization is a form of social division of labor both between different sectors and spheres of social production, and within an enterprise at various stages. production process. In industry, three main forms of specialization are distinguished: subject (for example, automobile, tractor factories), piece by piece (for example, a ball bearing plant), and technological - staged (for example, a spinning factory).

Improvement, improvement of the production profile of subject-specialized enterprises, the development of detailed and technological specialization lead to the expansion of production ties - cooperation. The specialization of production in a number of industrialized countries has mainly followed the path of expanding detail and technological specialization.

Scheme of specialization, i.e. a set of specialties, becomes more and more complex, as the labor process itself becomes more complex and deepened. In the old days, mankind owned several specialties, and above all, a hunter and a farmer. Today's lists of specialties include many thousands of very different professions. The vast majority of them require training (sometimes many years) in special skills and labor techniques. Specialization has now reached such a degree that the objects around us, as a rule, are no longer possible to produce alone. The need for a constant exchange of the fruits of specialized labor today determines the nature of the relationship between people in society.

An important reason for the emergence of the market is the natural limitation of human production capabilities. Even the most capable person can produce only a small amount of goods. In society, not only the production possibilities of a person are limited, but also all other factors of production (land, equipment, raw materials). Their total number has limits, and the use in any one area excludes the possibility of the same production use in another. In economic theory, this phenomenon is called the law limited resources. Resource constraints are overcome by exchanging one product for another through the market.

The reason for the formation of the market is the economic isolation of commodity producers so that they can freely dispose of the results of their labor. Benefits are exchanged by completely independent, autonomous producers in making economic decisions. Economic isolation means that only the manufacturer decides what products to produce, how to produce them, to whom and where to sell. An adequate legal regime for the state of economic isolation is the regime of private property. The exchange of products of human labor primarily presupposes the existence of private property. With the development of private property, the market economy also developed. The highest level of private property and market relations reached under capitalism. Objects of private property are diverse. They are created and multiplied through entrepreneurial activity, income from running one's own economy, income from funds invested in credit institutions, shares and other securities.

In the future, the isolation of commodity producers began to spread to collective and other forms of ownership. Cooperatives, partnerships, joint-stock companies, state and mixed enterprises arose.

In addition, the reason for the formation of the market lies in the opportunity (freedom) for each economic entity to ensure its own interests. The market implies freedom of competitive behavior, freedom of management, protection of the interests of a particular commodity producer. Non-market regulation of the economy is inevitable in any system, however, the less the commodity producer is constrained, the more scope for the development of market relations.

Market Functions

The market has a huge impact on all aspects of economic life, performing a number of economic functions.

The most important function of the market is regulatory. In market regulation, the ratio of supply and demand, which affects prices, is of great importance. The price rises - a signal to expand production, falls - a signal to reduce. In modern conditions, the economy is controlled not only by the "invisible hand", which A. Smith wrote about, but also by state levers. However, the regulatory role of the market continues to be preserved, largely determining the balance of the economy. The market acts as a regulator of production, supply and demand. Through the mechanism of the law of value, supply and demand, it establishes the necessary reproduction proportions in the economy.

The market performs a stimulating function. Through prices, it stimulates the introduction of the achievements of scientific and technological progress into production, reducing the cost of production and improving its quality, expanding the range of goods and services.

The next function of the market is informational. The market is a rich source of information, knowledge, information needed by business entities. It gives, in particular, information about the quantity, range and quality of those goods and services that are supplied to it. The availability of information allows each firm to verify own production with changing market conditions.

The intermediary function of the market lies in the fact that in a normal market economy with sufficiently developed competition, the consumer has the opportunity to choose the optimal supplier of products. At the same time, the seller is given the opportunity to choose the most suitable buyer.

The market performs a sanitizing function. It clears social production of economically weak, unviable economic units and, conversely, encourages the development of efficient, enterprising, promising firms.

The market also allows solving the problems of the standard of living, the structure and efficiency of production.

The market allows the use of universal human values. The market itself is the property of world civilization. He demonstrates his abilities in developed countries, in developing countries, and regardless of national, ideological and other characteristics.

The mechanism of the market frees the economy from the shortage of goods and services. Both in theory and in practice, the market economy is mostly deficit-free within the limits of the resources (including imports) that the country has at its disposal. The deficit is contrary to the economic interests of market participants. Differences between the appearance of a need and its satisfaction are possible. They are due to the scientific and technical potential available in society, the availability of resources, and are temporary.

In the market, the sale of value and bringing goods to the consumer are carried out. The market serves as a link between production and consumption.

The market affects all phases of reproduction - production, distribution, exchange and consumption. In this sense, the market is a self-regulating system of reproduction, all links of which are under the constant influence of supply and demand.

Through a social function, the market differentiates producers. It provides the state with the best opportunities to achieve social justice in the national economy, which could not be achieved under conditions of total nationalization.

Market Structure

The market includes elements directly related to the provision of production, as well as elements of material and monetary circulation. It is associated with both industrial and spiritual spheres. Accordingly, the market has a diverse structure.

According to the objects of exchange, the goods market, the service market, the capital market, the securities market, the labor market, currency market, market of information and scientific and technical developments.

In a spatial context, a local (local) market is distinguished, which is limited to one or several regions of the country; the national market, which covers the entire national territory; global market covering all countries of the world.

According to the mechanism of functioning, they distinguish between free (regulated on the basis of free competition of independent producers); monopolized (the conditions of production and circulation are determined by a group of monopolies, between which monopolistic competition is maintained); regulated (an important role belongs to the state, which uses economic instruments of influence) markets.

Sometimes a planned-regulated market is also singled out. Here, the plan plays a leading role in ensuring the basic proportions of production and circulation; there is a centralized regulation of pricing, financial, credit and monetary circulation.

In accordance with the current legislation of a country, legal, or official, and illegal, shadow, markets are distinguished.

According to the degree of saturation, equilibrium is distinguished (demand and supply approximately coincide); scarce (demand exceeds supply); excess (supply exceeds demand) markets.

In the economy, there are not only separate, isolated markets, but also a single market system, all elements of which are in certain relationships with each other.

Market infrastructure is a system of institutions and organizations that ensure the free movement of goods and services on the market. There are other definitions of market infrastructure. It is characterized as a complex of elements, institutions and activities that create organizational and economic conditions for the functioning of the market, as well as a set of institutions, organizations, state and commercial enterprises and services that ensure the normal functioning of the market.

The organizational base of the market infrastructure includes supply and marketing, brokerage and other intermediary organizations, commercial firms of large industrial enterprises.

The material base consists of transport systems, storage and container facilities, information system and means of communication.

The credit and settlement base includes separate banking and insurance systems, large independent banking and credit and savings institutions, as well as medium and small commercial banks of various volumes of operations.

The most important elements of the market infrastructure are fairs, auctions, exchanges. The fair is a regular market of wide significance, which is organized in a specific place. It may be a place of occasional trade or a place of seasonal sale of goods of one or more kinds. Fairs originated in Europe in the early Middle Ages. At the beginning of the XX century. international fairs have been widely developed, where deals are made on a national and international scale. Now industry-specific (more often technical) fairs and fairs of consumer goods have been developed with symposia, congresses, and seminars.

Auctions deal with products that are not available on the market. Here the main guideline is to obtain the maximum price for any product. An auction is a public sale of a product in a predetermined place. The goods sold go to the buyer who named the highest price. There are forced auctions, which are held by the judiciary in order to collect debts from non-payers, and voluntary auctions, which are organized at the initiative of the owners of the goods being sold. Special firms working on a commission basis are created to conduct auctions. There are also international auctions. They are a kind of public open auction, where goods of a certain range are sold.

Exchange - a meeting place for buyers and sellers, a place where transactions are concluded. Most exchanges are corporations. Only individuals can be members of exchanges, and only persons who have the right to conclude contracts on the exchange can act as corporations. The vast majority of exchange turnover is concentrated in the leading trade and financial centers of the USA, Great Britain and Japan.

Distinguish commodity, stock exchanges and labor exchanges. Commodity exchanges operate on commodity markets. Here transactions for the sale of cash goods are carried out on the basis of a preliminary inspection, according to samples and standards. Transactions with the obligation to deliver goods in the future are common. These are the so-called futures transactions. On modern commodity exchanges, only 1-2% of transactions are the delivery of real goods. It is not the goods themselves that are sold and bought as such, but contracts for their supply. In conditions of constant fluctuations in supply and demand, prices on the commodity exchange can change in a matter of minutes. By setting the so-called urgent prices, commodity exchange provides producers and consumers with minimal price risk.

There are mainly two types of securities circulating on the stock exchange: shares of enterprises, companies, firms; bonds issued by the government of the country, local governments, utilities, as well as private companies. The purchase and sale of securities on the stock exchange takes place on the basis of their exchange rate, which fluctuates depending on the relationship between supply and demand. The stock exchange determines the real market prices of shares and bonds of certain companies. These prices depend on the level loan interest and the amount of dividend and interest paid to holders of shares and bonds. Obtaining a high income (profit) on the stock exchange based on the exchange rate difference of securities in exchange practice is called stock speculation. Market prices for securities are regularly updated taking into account changes in supply and demand, volume of orders and incoming financial information. the largest stock exchanges in the world are New York, London, Tokyo, Frankfurt am Main, Parisian.

The labor exchange is an organization that specializes in intermediary operations between employers and workers for the purpose of buying and selling labor power. It allows to streamline the hiring of labor by enterprises and reduce the time for citizens to search for a job.

In addition to employment activities, labor exchanges provide services to people who want to change jobs, study the demand and supply of labor, collect and disseminate information on the level of employment in relation to certain professions and regions. Under the existing laws of most countries, all vacancies in enterprises must be registered on local exchanges. Labor exchanges provide financial support to employees in case of involuntary unemployment.

The credit system is an element of the market infrastructure. It includes banks Insurance companies, funds of trade unions and any other organizations that have the right to commercial activities. The credit system includes everyone who is able to mobilize temporarily free funds, turn them into loans, and then into investments. The core of the credit system - banking system. It includes national (state), commercial (they accept deposits and turn them into loans), mortgage (give money secured by real estate), innovative (credit the development of technological innovations) and investment banks.

Market infrastructure also includes public finances. They are based on republican and local budgets. Through the state budget, there is a redistribution of income, financing of production and social programs.

An important part of the market infrastructure is an extensive system of legislation that regulates the legal relationship between economic entities and determines the rules of the "market game".

Economic subjects of a market economy

The subject structure of a market economy is a system of relationships between many subjects, expressing their goals, equal but mutually consistent economic interests, nature, forms of organization and interaction regarding the movement of goods and services.

The subjects of a market economy are: entrepreneurs; workers selling their labor; end users; owners of loan capital; owners of securities; merchants, etc. The main subjects of the market economy are usually divided into four groups: household; enterprise (firm), bank and state (government).

Household - an economic unit operating in the consumer sector of the economy - may consist of one or more persons. It ensures the production and reproduction of human capital, independently makes decisions, is the owner and supplier of any factor of production in a market economy, strives to maximize the satisfaction of personal needs (and not to increase profits).

An enterprise (firm) is an economic unit that operates to generate income (profit), strives to maximize income, makes decisions independently, uses factors of production to manufacture products for the purpose of selling them. It involves investing in a business of own or borrowed capital, which entails risk and responsibility. The income received by the enterprise (firm) is spent not just on personal consumption, but to expand production.

A bank is a financial and credit institution that regulates the movement of the money supply necessary for the normal functioning of the economy.

The state (government) is represented by various government agencies exercising legal and political power to ensure, if necessary, control over economic entities and over the market to achieve public goals. Budget organizations, which represent the state, do not aim to make a profit, but implement the functions of state regulation of the economy.

The interaction of households, firms and the state can be represented by a model of economic circulation.

The model of economic circulation allows us to study the behavior of firms and households in the markets for factors of production and consumer goods.

In the market for factors of production, households act as sellers, offering the firms acting here as buyers labor, land, capital, and entrepreneurial abilities. Having acquired everything necessary to create consumer goods, firms carry out their production.

The second meeting of households with firms takes place in the market for consumer goods. But now their roles have changed: firms are sellers, and households are buyers. The movement along the outer circle of the scheme, along which the flows of goods move, closes.

But simultaneously with the movement of goods there is a movement cash flows. The movement of money begins with firms that own the start-up money capital needed to purchase factors of production. The money given in exchange for factors of production act as costs of production. But, once in the hands of the owners of production resources, money takes the form of income for factors of production, and when spent on the purchase of consumer goods, it appears in the form of household expenses. And, finally, after the sale of goods and services produced by firms, the money acts as income for the owners of firms.

The model shows that two oppositely directed flows are moving in the economy: the flow of goods and the flow of money spent on their purchase. Both streams are continuous, flow simultaneously and represent the main element of the mechanism of the functioning of a market economy. An important consequence of the circular flow model is that the total sales of firms is equal to the total income of households.

A distinctive feature of economic agents is the adoption and implementation of independent decisions in the field of economic activity.

The position and role of each economic agent is determined by its relation to the factors of production that it owns. Some have capital and economic power, determine the forms of management, participate in management, and engage in entrepreneurial activities. Others manage only their own labor force, their ability to influence the organization of production, income distribution, and participation in management is limited.

It is customary to refer to households as those who carry out operations related to housekeeping, i.e. predominantly consumption. It is assumed that all economic resources ultimately belong to households. They earn income by providing economic forces- labor, capital, land, etc., which they have, in other words, through the provision of factor services.

The income received is used by them to purchase necessary goods, as well as to create savings. As consumers, households are independent, i.e. they have the right to make decisions independently, but this independence is limited by the amount of income and the system of regulation that exists in society.

Enterprises (firms), unlike households that primarily perform the function of consumption, mainly carry out production activities, as well as investment. Enterprises differ in their forms of ownership (private cooperative, state), size and scale of production, types of production activities, etc. In economic statistics, enterprises (firms) are often divided into two types of agents: non-financial and financial.

Enterprises (firms) are engaged in entrepreneurial, commercial activities, the purpose of which is to make a profit. Several specific functions are performed in society by non-profit organizations, for example, charitable foundations, trade union organizations, sports societies, associations of entrepreneurs. Their main task is to directly satisfy the needs of people, and not to make a profit. So, the goal of non-profit organizations in the field of sports is the physical development of the individual and the training of athletes.

Although the main functions of the state are to provide for public needs and security, it has always played an important role in the economic life of society. The state actively intervenes in the economy, using various forms and methods. There are various indicators and criteria for the economic activity of the state, among them - the share of government spending in GDP; share of taxes in GDP; dimensions state property and products manufactured by state-owned enterprises.

The modern market economy is based on the interaction of the private and public sectors of the economy. Depending on the degree of intensity of the impact on the economy and on the priority tasks solved by the state, the following models of the modern market economy are distinguished: a socially oriented economy, a mixed economy and a corporate economy.

With the first model, the target orientation government programs connected with the protection of the interests of citizens, and the principles of economic regulation are expressed in long-term programs. The share of the public sector in the economy is 30%. (Germany) In a mixed economy, the state creates conditions for the development of entrepreneurship, using primarily tactical methods. The share of the public sector is relatively small here (USA).

The corporate economy assumes the target orientation of state programs to protect the interest big business and identification of key priorities (Japan, Sweden).

As for the Russian economy, it historically relied on the primacy of either state, or communal, or public property, which determined the specifics of the main problems of modern market reforms.

If we evaluate economic goals modern system management on the scale of the whole society, they can be reduced to the following main provisions:

1. Security economic growth and more high level and quality of life of the population.

2. Increasing the efficiency of the use of limited production resources throughout society, that is, achieving the best results at the lowest cost.

3. Achieving full employment of the able-bodied population. 3All who are able and willing to work must be provided with jobs.

4. Stable price level. Constantly changing prices lead to a change in the behavior of people and enterprises, create tension and uncertainty in economic activity.

5. Economic freedom. All economic entities must have a high degree of freedom in their economic activities.

6. Fair distribution of income. We have already said that fairness in distributive relations does not mean equalization. It is that equal capital and equal labor should bring equal income, and that no group of the population should be destitute while others are inordinately luxurious.

7. Maintaining a reasonable ratio of exports and imports, that is, if possible, an active trade balance in international economic and financial relations.

Conclusion

So, in a general sense, the market is understood as a set of market relations in the sphere of exchange, through which the sale of goods is carried out.

The market is a complex economic system of social relations in the sphere of economic reproduction. It is due to several principles that determine its essence and distinguish it from other economic systems. These principles are based on the freedom of man, his entrepreneurial talents and on the fair treatment of them by the state.

Regardless of the type of market structures, a necessary condition for their normal functioning is economic freedom, independence, independence of subjects of economic relations.

The functions of the market are that the market distributes the total volume of production, that is, any given product is distributed among consumers on the basis of their ability and desire to pay the existing market price for it, it performs an orienting function, which means it balances supply and demand, and the market contains incentives for technological progress and promotes capital accumulation.

IN economic theory distinguish between different types of markets, which are based on their own infrastructure that serves their needs. In addition, the market economy is served by institutions that link all markets into a single whole. Each element of the market system has an independent value, but the normal functioning of the market economy is possible only with the coordinated work of all its parts, in conditions of soft state regulation and stimulation of its development.

The subjects of a market economy are sellers and buyers.

Economic ties ensure the movement of products from producer to consumer, there is a multilateral exchange between producers, on the one hand, and consumers, on the other.

These exchange processes are public division labor, which, on the one hand, separates producers, divides them according to the types of labor activity, on the other hand, creates stable functional relationships between them. The first develops into economic isolation, into the independence of the management of each manufacturer and acts as the economic basis for the formation of subjects of market relations. The second is modified into exchange processes on an equivalent basis through the purchase and sale of goods.

As a result, the economic prerequisite for the transformation of a simple producer into a subject of market relations materializes and production becomes commercial. Producers independently organize the production and sale of products, reimburse costs, expand and improve production. Exchange processes in the conditions of commodity-money relations take the form of market relations.

From the limited economic resources follows the need for economic (economic) activity, in other words, the transformation and adaptation of economic resources in order to meet needs.

Economic (economic) activity is nothing more than a constant work on the evaluation, comparison and selection of alternative options for the use of economic resources. This happens at all levels, economic entities (participants in the economic process) participate in this.

To business entities, or, as they are often called in economics, economic agents, it is customary to attribute all those who independently make decisions, plan and implement practical measures in the field of economic (economic) activity. Economic agents include individuals, families, heads of economic units (enterprises, banks, insurance companies), boards joint-stock companies, government agencies and institutions.

A distinctive feature of economic agents is the adoption and implementation of independent decisions in the field of economic activity. These kinds of decisions are made and implemented by consumers. They either buy goods or refuse to buy. Independent decisions are made by enterprises producing goods and services. They plan what to produce, in what sizes, at what prices and under what conditions to sell.

The position and role of each economic agent is determined by its relation to the factors of production, by what particular factors of production it owns. Some have capital and economic power, determine the forms of management, participate in management, and engage in entrepreneurial activities. Others manage only their own labor force, and their ability to influence the organization of production, the distribution of income, participation in management is limited.

At the same time, different attitudes towards the factors of production not only divide, but also in a certain way connect people, create a mutual interest in combining heterogeneous factors, joint participation in the organization, and the constant renewal of various spheres and types of economic activity.

In accordance with the role played by economic agents, it is customary to distinguish between households, enterprises (firms) and the state (government bodies, state institutions), often non-profit organizations.

Market objects include goods and money.

What is a commodity? A commodity is a product of labor intended for exchange through purchase and sale. A product has two properties: first, it satisfies some human need, secondly, is a thing that can be exchanged for another thing. In other words, a commodity has a use value and an exchange value.

And no less important, the goods must not only be manufactured (produced), not only manufactured for others, but also sold to other people, that is, transferred on the basis of equivalent (equivalent) compensation (a gift, although produced to meet the needs of another person , is not a commodity).

Things do not become commodities in and of themselves, but only when they are objects of exchange between people. Therefore, the commodity expresses the relationship between people regarding the exchange of products of labor. The exchange of goods can take many forms, but in all cases, an exchange is an act in which we receive or give away one thing in exchange for another.

Money has been known since ancient times, and they appeared as a result of a higher development. productive forces and trade relations.

The entire history of the development of the economy is at the same time the history of the development of commodity production and commodity relations, where the links between producers were carried out through the exchange of one commodity for another. In the early stages, the exchange was random and carried out without the help of money.

Such an exchange (now called "barter") is fraught with considerable difficulties. The spontaneous process of exchange forced society to take a cardinal step in the evolution of exchange operations. As a result of a very long and complex development of exchange, one commodity stood out for the role of a universal equivalent. With the development of exchange and the creation of a world market, such a role was assigned to noble metals - gold and silver - due to their natural properties, such as qualitative uniformity, quantitative divisibility, storability and portability. Since that time, the entire commodity world has been divided into two parts: into "commodity niello" and a special commodity that plays the role of a universal equivalent - money.

Thus, money is a historical category that develops at each stage of commodity production and is filled with new content, which becomes more complex with changes in the conditions of production. Transfer from subsistence farming to commodity, as well as the requirement to observe the equivalence of exchange, necessitated the emergence of money, without the participation of which the mass exchange of goods is impossible, developing on the basis of production specialization and property isolation of commodity producers.

Thus, the essence of money lies in the fact that it is a specific commodity type, with the natural form of which the social function of the universal equivalent grows together. The essence of money is expressed in the unity of their two properties: universal immediate exchangeability and universal labor time.

The essence of money as an economic category is manifested in their functions, which express the inner content of money.

Money performs the following five functions: a measure of value, a means of circulation, a means of payment, a means of accumulation and savings, and world money.

The essence of the market is most fully manifested in its functions. The most important functions include:

• - the function of self-regulation of commodity production. It manifests itself in the fact that with an increase in demand for a product, producers expand the scale of their production and raise prices. As a result, production begins to decline;
• - stimulating function. When prices fall, producers reduce production, while at the same time looking for ways to reduce costs by introducing new equipment, technology, improving the organization of labor;
• - the function of establishing the social significance of the produced product and labor costs. However, this function can operate in conditions of deficit-free production (when the buyer has a choice, the absence of a monopoly position in production, the presence of several producers and competition between them);
• - regulatory function. With the help of the market, the main micro - function of democratization of economic life, the implementation of the principles of self-government are established. With the help of market levers of influence, social production is freed from its economic unviable elements, and due to this, commodity producers are differentiated.

The basic principles of a market economy are as follows:

• - freedom of economic activity, that is, free market competition goods, services and securities without interference in the process of purchase and sale of the state or local authorities and administration. At the micro level economic activity takes on the character of entrepreneurial activity (business). Free enterprise expresses the free right of private firms to use economic resources to produce goods of their own choice and to sell the goods produced in markets they themselves have chosen at free prices;
• - equality of market subjects;

The main economic argument in favor of a market system is that it promotes the efficient allocation of resources. According to this thesis, a competitive market system directs resources into the production of those goods and services that society needs most. It dictates the application of the most effective methods combining resources for production and contributes to the development and implementation of new, more efficient production technologies. The "invisible hand" thus governs personal gain. It provides society with the production of the greatest amount of necessary goods from available resources. This therefore implies maximum economic efficiency.

It is distributional efficiency that makes most economists question the need for government intervention in free markets, or government regulation of their operations, except when such intervention becomes compelling.

An important non-economic argument in favor of a market system is freedom. One of the fundamental problems of organizing society is how to coordinate economic activity many individuals and businesses.

There are two ways of such coordination: one is centralized control and the use of coercive measures; the other is voluntary cooperation through the market system. Only a market system is capable of coordinating economic activity without coercion. The market system represents freedom of enterprise and choice; in fact, on this basis, she succeeds.

Employers and workers are not driven by government directives from one industry to another in order to meet production targets set by some all-powerful government agency. On the contrary, under a market system they are free to seek to increase their own profits, subject, of course, to the rewards and punishments they receive from the market system itself.

The market mechanism has both advantages and disadvantages. The positive functions of the market make it, in principle, a fairly effective system. This does not mean, however, that market relations are absolutely perfect and ensure the progressive development of society in everything. The market economy has its inherent flaws (imperfections).

First, the functioning of the market system is based on the spontaneous action of economic regulators. This creates instability in the economy, and the inevitable disproportions are not eliminated immediately. Secondly, when the market environment is uncontrolled, monopolized structures inevitably arise that limit the freedom of competition with all its positive functions, and create unjustified privileges for a limited circle of market participants.

Thirdly, spontaneously operating mechanism market does not tune the economy to meet many social needs, internally does not contribute to the formation of funds that go to meet the needs of society that are not directly related to business. First of all, this is the formation of social transfers (pensions, scholarships, benefits), support for healthcare, education, science, art, culture, sports and many other socially oriented areas.

Fourth, the market does not provide stable employment for the able-bodied population and guaranteed labor income. Everyone is forced to independently take care of their place in society, which inevitably leads to social stratification, that is, division into rich and poor, and increases social tension. Market relations create favorable conditions for the manifestation of selfish interests that give rise to speculation, corruption, racketeering, drug trafficking and other antisocial phenomena.