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`Capitalist economics developed out of the interactions of the following elements.
A product is any good produced for exchange on a market. "Commodities" refers to standard products, especially raw materials such as grains and metals, that are not associated with particular producers or brands and trade on organized exchanges.
There are two types of products:
capital goods and
consumer goods.
Capital goods (i.e., raw materials, tools, industrial machines, vehicles and factories) are used to produce consumer goods (e.g., televisions, cars, computers, houses) to be sold to others.
The three inputs required for production are:
labor,
land (i.e., natural resources, which exist prior to human beings) and
capital goods.
Capitalism entails the private ownership of the latter two — natural resources and capital goods — by a class of owners called capitalists, either individually, collectively or through a state apparatus that operates for a profit or serves the interests of capital owners.
Money was primarily a standardized medium of exchange, and final means of payment, that serves to measure the value of all goods and commodities in a standard of value. It eliminates the cumbersome system of barter by separating the transactions involved in the exchange of products, thus greatly facilitating specialization and trade through encouraging the exchange of commodities. Capitalism involves the further abstraction of money into other exchangeable assets and the accumulation of money through ownership, exchange, interest and various other financial instruments.
Labor includes all physical and mental human resources, including entrepreneurial capacity and management skills, which are needed to produce products and services. Production is the act of making products or services by applying labor power to the means of production.[9][10]
Capitalism is the system of raising, conserving and spending a set monetary value in a specified market. There are three main markets in your basic capitalistic economy which are labor, goods and services, and financial. Labor markets (people) make products and get paid for work by the goods and services market (companies, firms, or corporations, etc.) which then sells the products back to the laborers. However both of the first two markets pays in to and receive benefits from the financial market, which handles and regulates the actual money in the economic system. This includes banks, credit-unions, stock exchanges, etc. On a monetary stand point governments control just how much money is in circulation worldwide which plays an immense role on how money is spent in our own country.
Most of these institutes focus on a form of economics called macroeconomics which keeps its eyes on things such as inflation: the rate at which money loses its value over time; growth: how much money a government has and how quickly it accrues money; unemployment, and rates of trade between other countries. Whereas microeconomics deals with individual firms, people, and other institutions that work within a set frame work of rules to balance prices and the workings of a singular government.
Both micro and macroeconomics work together to form a singular set of evolving rules and regulations. The governments (the macroeconomic side) set both national and international regulations that keep track of prices and corporation’s (microeconomics) growth rates, set prices, and trade while the corporations influence what federal laws are se`