How is the position of the concrete market and the abstract market in economic activity? We will discuss this subject in the following explanation.
The Position of Concrete Market in Economic Activity
The concrete market has an important role. It functions to fulfill everything that people need directly. People go to the market everyday to run economic activity.
1) A farmer sells his crops.
2) A producer holds the trade.
3) The small industry businessmen buy some raw materials or sell their products.
4) The housewives go shopping to fulfill their daily basic requirements.
5) The pedicab drivers, the rural transportation drivers, and some labour offer service to the consumers.
Those are some examples of economic activity. It is obvious that society’s economic activity is mostly taking place at the market.
The uses of the concrete markets to society’s economic activity are follows.
a. It gives more chance to people to hold the consumption, production, and distribution. For examples.
- Consumers get goods and services they need.
- Producers buy raw materials and sell their products.
- Distributors distribute their commodities.
b. As a place to have goods and service transaction.
c. To notify some information of goods and services price as the price is set by a bargaining activity at the market.
d. It gives the businessmen stimulus to develop their business. In the concrete market they are easy to promote and to sell their products.
e. It makes a country development run well. Market provides many different useful matters needed fir the development.
f. Market absorbs many human resources. For example, at the market people have the right to make their livelihood as merchants, security guards, cleaning service, parking attendants, food and drink sellers, rest room attendants, and pedicab drivers. In other words, market assists to reduce the rat of unemployment.
g. It provides some information about many different demands and bargaining of goods and services needed by consumers.
The position of the Abstract Market in Economic Activity
It has been explained in the previous elaboration that the concrete market has important roles. So, does the abstract market, particularly, relating to the foreign economic relationship, the production development, and the labour problems.
The position of the abstract market in economic activity are follows.
1. Relating to the foreign economy
a) The foreign currency exchange has some roles as follows.
- The place to have a currency exchange. For example, an importer who need money in US dollar to pay his imported commodity is able to exchange his rupiah money into US dollar in the foreign currency exchange.
- The place to get some information about exchange value of rupiah towards foreign currency (foreign money). Thus, the position of rupiah can be detected in international economy. This case will indicate the good or bad condition of national economy.
b) Indonesian Commodity Exchange (Bursa Komoditi Indonesia/BKI) has these following roles.
- The place of world well-run commodity.
- The means to develop Indonesia’s exporting potency into internationally high rate. For examples, rubbers, tobaccos, and textiles.
- The place to get information about the price of international commodity which is to be an important thing for some exporters.
2. Relating to the production development.
Money and capital market (stock exchange) have the following roles.
- The place for businessmen to get capital in order to develop their business.
- The place for capital investors to obtain interest from their invested capital.
3. Relating to the problem of the labour force
The labour market roles as a place where people get information about vacancy in country or abroad. Thus, the rate of unemployment can be reduced.
4. The foreign currency exchange, the stock exchange. Indonesian commodity exchange and the labour market absorbs the number of labour. It comes to occur because many people get involved in the abstract market activity as either as the market agent or as the employee.