Definition: A resource market is a place, either physical or virtual, where materials, assets and other elements are exchanged between parties. In other words, supply and demand interact with each other to trade different kinds of items.
What Does Resource Market Mean?
The resource market is formed by the natural resources, land, financial and labor market. These are the primary resources required by any economy to function and grow adequately. In each of these environments, market forces interact with each other to set prices according to the laws of supply and demand. Transactions normally occur in virtual trading platforms, in the case of raw materials, natural resources and capital (financial market) and they are conducted by companies and individuals through financial institutions or government agencies.
In free market economies the government oversees these operations to ensure fairness and legality. Other economic systems like socialism or communism are more strict and limitative, since the government steps into the market, normally as a unique supplier, in the case of strategic natural resources. These markets affect the macroeconomic environment of any country and in modern days, globalization has increased the effect these markets have in the world’s economy.
Example
Australia is considered to be a well developed country with a widely diversified economy and a large gross domestic product per capita. The country also has a large financial market with a daily trading volume of $1.2 billion. The country participates actively in the global commodities market and it has a 2% unemployment rate. On the other hand, the country is a major wheat and wool exporter and a natural gas producer. All these characteristics make Australia a very prosperous country.
The resource market overall is highly dynamic and the government has implemented a legal framework that promotes entrepreneurship, job specialization and access to financial resources. Businesses from other countries are coming to Australia and the country is slowly turning into a one of top investments destinations of this decade.
