Following the Funds

• Markets of production factors, which are those that exchange money to buy or rent a land, work or capital and the business factor used in production.

• Financial markets, those that the people want to borrow money interact with those that want to get a loan. In this market, the supply and demand of loan determine the interest rate, which is the price you need to pay to get someone to borrow you their money for some time. Since almost all the governments have deficits and need to ask for a lot of borrowed money, they are the ones that can be seen the most in the financial markets.

• Markets of goods and services are those in which the people and the government buy what the companies make.

In order to obtain production factors of land, capital and business factors, the companies do payments such as rents, salaries, interests and benefits to the homes. The homes then take this income that they receive for having sold these factors and use them to pay for goods and services, to pay taxes or to save up. The government buys goods and services using the tax income they collect or money they borrow from the financial markets. The financial markets also provide dollars to the corporations in order to do investments. These dollars are added to those that the companies obtain of the selling of goods and services to homes and the government.

Not all of the transactions in the financial markets are pertinent for the calculus of the GDP. The GDP measures of the value of what is produced in a period of time and most of the transactions in the financial markets are to exchange rights of property of things produced a long time ago. For example in the case of property or house that was built many years ago would not have anything to do with current production, so selling of that house would not count in the GDP of this year. The GDP within the year would only include the sales of newly made housing.

Beginner Money Investing Cash Flow and Assets Assets Following the Funds