Question

Present the three-sector model from Marthinsen: Financial Sector, Goods and Services Sector, and Foreign Exchange Sector, Fill in each sector with current information and data.

Answer 1

Financial sector

The financial sector is a segment of the economy composed of companies and institutions that provide commercial and retail customers with financial services. A large portion of this sector produces mortgage and loan income, which increases the value as interest rates decline. The economy's health is mainly dependent upon the efficiency of its financial sector. The better the economy is, the safer it is. A weak financial sector typically means a declining economy.

The financial sector is equated with Dalal Street by many people and the exchanges that operate on it. But it has a lot more to it than that. The financial sector is one of the essential components of many developed economies. It's made up of brokers, financial institutions, and money markets— all of which provide the necessary services to help keep Main Street going every day.

For an economy to remain stable, a healthy financial sector is required. This sector is advancing loans for businesses so they can expand, grant homeowners mortgages, and issue insurance policies to protect individuals, businesses, and their assets. It also helps to build up retirement savings, which supports millions of people.

The financial sector generates a good portion of its lending and mortgage income in a setting where interest rates go down. When the rates are low, the economic conditions open the doors for more spending and capital projects. If that happens, the financial sector gains, which means more economic growth.

Goods and service sector

A GOOD is an object people want that they can touch or hold. A SERVICE is an action that a person does for someone else. Examples: Goods are items you buy, such as food, clothing, toys, furniture, and toothpaste. Services are actions such as haircuts, medical check-ups, mail delivery, car repair, and teaching.

Goods are tangible objects that satisfy people's wants. Services are actions, such as haircuts and car repair, which also satisfy people's wants. A key point to emphasize to young children is that goods and services must be produced - they don't appear magically on store shelves. Similarly, they are produced using scarce productive resources (natural, human, and capital); thus, the goods and services themselves are considered scarce.

Depending on the grade level, it may be appropriate to teach the distinction between consumer goods and capital goods. Consumer goods are the "final" goods purchased by consumers. Capital goods are those used to produce other goods and services (e.g. tools, equipment, machinery). A skillful teacher can use these concepts to help students think about their futures in the world of work. Instead of asking students what they want to be when they grow up, ask them to identify what goods or services they might want to produce when they grow up.

Forieghn exchange sector

Foreign exchange typically refers to the exchange rate or the foreign exchange market. The foreign exchange is the global market for currency trading. The foreign exchange market determines the value of all different currencies. International investments and trade are handled by the foreign exchange by converting currency from one currency to another. A business or individual can purchase one currency using another currency. This process allows transactions to be completed in a different currencies. The foreign exchange market is unique. Factors that make the foreign exchange market unique are its continuous operation, large trading volume, and geographical dispersion. In addition, this market uses leverage to enhance profit margins. The foreign exchange is a floating exchange rate rather than a fixed exchange regime. Due to this fact, there are many influences which cause exchange rate fluctuations. Overall, exchange rates are affected by a variety of factors. Factors which can and do affect foreign exchange rates are political conditions, economic factors and market psychology. Economic factors which may affect the foreign exchange rate are inflation levels and trends, a balance of the trade levels and trends, government budgets and government fiscal policy. Political conditions, such as destabilization of a government and political upheaval can negatively impact a country’s economy and therefore also have an effect on the foreign exchange.