Basic of finance

Now days it is very common to hear that US Economy is weak or Indian economy is depreciating or share market is out performing but there is common question 'HOW' if companies were outperforming 2 months ago and there was upside trend of growth, their manufacturing of product and sale was on peak then how they can slow down suddenly and hit the country economy or how share market works. For knowing all this we need to know finance in layman type language so here is my initiative to provide you all with some basics so lets start with very basic thing:

What is economy?

Economy may be defined as activities that involves the natural/any resources of country/state/region and money/wealth for production and consumption of goods and services for the enrichment and growth of that region and also to ensure that the resource are used in effective manner and are not misused.The geographical condition and ecology and also the natural resource present in that region plays a important role in country economic system. It also involve the labor cost, manufacturing and the distribution and trade type and way. Economy is also depended on the demand and supply ratio and credit to debit ratio.

What is finance?

Finance is a branch of economics which involves cash directly or indirectly through business transactions. It involves the way of obtaining funds from various sources such as bank, equity or debentures etc and their properly planned management for getting maximum profit out of it for the risk beard by the business as money/cash is arranged against some interest paid for it. Assets such as property or golds are also part of finance. It involves cost, time risk and money. 

What is a Share Market?

Like normal markets we in share market buy and sell equity or share of a particular company which is listed in the market. The most popular market in India is Dalal Street in Mumbai. These markets are also known as Stock Exchange market. The two most famous stock exchanges are BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). This market is quite different from normal market as in normal market we get product on printed MRP but here the MRP/value of share/equity change min to min depending on various reasons such as huge buying of particular stock or its selling, or good/bad news regarding that stock or policy of govt being changed etc.