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Economic Systems

An organized way in which a state or nation allocates its resources and apportions goods and services in the national community. Economy: the system of production and distribution and consumption. An economic system is the way a person, country, or area makes, distributes, consumes, buys, or sells services and goods. The type of system a government has depends a lot on the type of system. Some examples of economic systems are: socialist system, mixed, and capitalistic system

The Four Types

1. 2. 3. 4. Traditional Economy Market Economy Command Economy Mixed Economy

1. Traditional Economy Family or Community based Economic System that relies on custom and ritual to make its choices. Examples: Aborigines, Amazon Tribes, Any Sustenance Economy 2. Market Economy Individual or Consumer based Economic System that relies on the consumption choices of consumers. Examples: The U.S.A., Japan, Any Capitalist Economy? 3. Command Economy o Centrally Controlled Economy where the Government makes all decisions. o Examples: Cuba,China,Any Communist Country or Dictatorship 4. Mixed Economy o Economic System that incorporates some Governmental involvement into a Market Based Economy. o Examples: The U.S.A.?, Japan?, Most Modern Economies

Capital Markets
He part of a financial system concerned with raising capital by dealing in stocks, bonds, and other long-term investments. A market in which individuals and institutions trade financial securities. Organizations/institutions in the public and private sectors also often sell securities on the capital markets in order to raise funds. Thus, this type of market is composed of both the primary and secondary markets.

Money Market
A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year. Money market securities consist of negotiable certificates of deposit (CDs), bankers acceptances, U.S. Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements (repos).

Stock Market'
The market in which shares are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, it is one of the most vital areas of a market economy as it provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company's future performance. ROLE OF SEBI As part of economic reforms programme started in June 1991, the Government of India initiated several capital market reforms, which included the abolition of the office of the Controller of Capital Issues (CCI) and granting statutory recognition to Securities Exchange Board of India (SEBI) in 1992 for: (a) protecting the interest of investors in securities; (b) promoting the development of securities market; (c) regulating the securities market; and (d) matters connected there with or incidental thereto.

SEBI has been vested with necessary powers concerning various aspects of capital market Such As: (i) regulating the business in stock exchanges and any other securities market; (ii) registering and regulating the working of various intermediaries and mutual funds; (iii) promoting and regulating self regulatory organisations; (iv) promoting investors education and training of intermediaries; (v) prohibiting insider trading and unfair trade practices; (vi) regulating substantial acquisition of shares and take over of companies; (vii) calling for information, undertaking inspection, conducting inquiries and audit of stock exchanges, and intermediaries and self regulation organisations in the stock market; and (viii) performing such functions and exercising such powers under the provisions of the Capital Issues (Control) Act, 1947 and the Securities Contracts (Regulation) Act, 1956 as may be delegated to it by the Central Government.