Posted on 10/17/2008
at 12:27 PM
Category: Business
Posted by Tim
Here's a pretty good explanation of why we need stock markets. I never really thought about why we need them; I just know that they're there and that I'm loosing money big time right now :(
"Share values have dominated the news for weeks yet for many of us they seem a world away from our day-to-day life. Professor Alec Chrystal explains why stock markets exist.
It is easiest to answer this question with another question which is: why do we need companies?
Companies are legal entities which exist to co-ordinate the production of the goods and services that a modern economy delivers, and in the process provide employment to large numbers of people.
They are where many of us work and from which we buy many of the products we consume. They are not the only form a business organisation can take. Government-owned companies would be called public corporations. Small businesses may be "sole traders" or partnerships, which are not companies."
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