Introduction to Business Module Federal Reserve Monetary Policy Market Computer Industry Returns Market MSFT (Microsoft) Price Level Market.

Introduction to Business Module

Federal Reserve Monetary Policy MarketComputer Industry Returns Market

MSFT (Microsoft) Price Level Market

What Is a Market? Two or more

individuals, groups, or both, who come together to make exchanges. They are often referred to as a Buyer and Seller.

How, What and When Do They Exchange? They Exchange?

Resources with differing levels of scarcity

Different combinations of exchanges What roles can participants play in the

exchange? Types of Markets

Topics

Resources With Differing Levels of Scarcity Physical goods, such as, Soap and Cars Services, such as, Haircuts and

Checking Accounts Money

Different Combinations of Exchanges (1)

Goods for Goods Bartering, such as, a farmer who

trades fruit grown on their farm for wine produced by another farmer

Countertrade, such as, Ford Tractors traded for commodities, such as, wheat, hemp, or other industrial products

Different Combinationsof Exchanges (2)

Goods for Money & $$$ for Goods Purchasing household products from Walmart Selling your car in the classified advertisements

Different Combinations of Exchanges (3)

Services for Money Money for Services Purchasing phone service from MCI Repairing a neighbors car for money

Different Combinations of Exchanges (4)

Promises for MoneyMoney for Promises Paying money for car insurance in exchange

for a promise by the seller to compensate you for loss or damages to your car

Receiving money from a lender (Student loans), in exchange for your promise to repay the loan plus interest, some time in the future

Different Combinations of Exchanges (5)

Money for Money While visiting Paris, exchanging

U.S. Dollars for French Francs

What Roles Can Participants Play in the Exchange? Buyer or Seller Rule Maker

The Role of Buyers and Sellers

Price Setter or Price Taker Because of the scarcity of the

resource, when purchasing gasoline, the buyer is a price taker and the gas company is a price setter

What are the roles of Shaq and the Los Angeles Lakers?

The Role of the Rule Maker

Rule makers set the ground rules for a particular market and its transactions

NASD and its members SEC in the securities market

Types of Markets

Legal and Illegal Markets

Real and Virtual Markets

24/7 and Time Limited Markets

Legal and Illegal Markets

Purchasing a prescription drug from your local pharmacy

Purchasing cocaine from a drug dealer

Real and Virtual Markets Purchasing your textbook

at your college bookstore Purchasing your textbook

at Amazon.com

24/7 & Time Limited Markets

Purchasing your textbook at Amazon.com at anytime of day and any day of the week

Auctions, such as, eBay, where the timeframe to participate or complete the transaction is limited and expires

Markets of Interest

Labor Rules created by legislation,

such as, minimum wage laws, child labor laws, Equal Employment Opportunity Laws (e.g. ADA)

Organized labor sellers

Markets of Interest

Land Rules intensive, attorney or

realtor involved Land is scarce and unique There are no substitutes

Markets of Interest

Exchange Rates Market Players include:

Individuals purchasing and selling foreign currency

Multi-national Corporations, such as Ford, who periodically need to repatriate foreign currency into US Dollars

Large global banks Governments who enter the exchange to

strengthen or devalue a currency

Markets of Interest Capital and Financial

Stocks and Bonds

Markets of Interest

Other Financial Markets Commodities

Spot Market and Futures Market

IEM

Conclusion

Other Financial Markets Commodities

Spot Market and Futures Market

IEM

What is The Iowa Electronic Market (IEM) The IEM is an on-line,

computerized market Contracts are based on real-world

events A research tool A teaching tool Open to academic community

IEM Resources

IEM Introduction PowerPoint Presentation

http://www.biz.uiowa.edu/iem/trmanual/introIEM.ppt

IEM Traders Manualhttp://www.biz.uiowa.edu/iem/trmanual/

WebExchage Users’ Guidehttp://iemweb.biz.uiowa.edu/webexmanual/