How Recessions Work

In amarket economy, or a modified market economy such as the U.S. economy, production and consumption are connected in various "markets." Amarketis simply a place where consumers can go to buy things from producers and producers can go to sell things to consumers.

Agrocery storeis an example of a physical market. People who want to consumefoodgo to thegrocery storeand buy it from producers through a series of middlemen. The store itself is one of the middlemen, and there are usually others along the way (distribution companies, for example). Thelabor market是一个更abstract sort of market. In this market, businesses who want to consume work pay people to produce labor. In thestock market, consumers and producers buy and sell percentages of ownership of companies (seeHow Stocks and the Stock Market Workfor more information).

As you can see, almost everybody is both a producer and a consumer acting in more than one market. If you have a job, you are a producer of labor. Whenever you go shopping, you are a consumer of goods.