commodities

(noun)

term used to describe a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market.

Examples of commodities in the following topics:

  • Natural Resource Market

    • Not all commodities are natural resources, and not all natural resources are commodities, but commodity markets remain an important source for many resources.
    • There are two types of commodities:
    • Commodity markets are heavily regulated.
    • In the United States, the principal regulator of commodity and futures markets is the Commodity Futures Trading Commission (CFTC).
    • Esma sets position limits on commodity derivatives.

  • Commodities and Other Futures

    • Commodity "futures" are contracts to buy or sell certain certain goods at set prices at a predetermined time in the future.
    • Commodities traders fall into two broad categories: hedgers and speculators.
    • Hedgers are business firms, farmers, or individuals that enter into commodity contracts to be assured access to a commodity, or the ability to sell it, at a guaranteed price.
    • Thousands of individuals, willing to absorb that risk, trade in commodity futures as speculators.
    • Speculating in commodity futures is not for people who are averse to risk.

  • Types of Currency

    • Commodity money value comes from the commodity out of which it is made.
    • The commodity itself constitutes the money, and the money is the commodity.
    • The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money.
    • Commercial bank money differs from commodity and fiat money in two ways.
    • Fiat, Commodity, and Commercial Bank money are three main types of money

  • The Definition of Money

    • Money comes in three forms: commodity money, fiat money, and fiduciary money.
    • The value of commodity money comes from the commodity out of which it is made.
    • The commodity itself constitutes the money, and the money is the commodity.
    • Conch shells have been used as commodity money in the past.
    • The value of commodity money is derived from the commodity out of which it is made.

  • The Role of the Financial System

    • A financial market or system is a market in which people and entities can trade financial securities, commodities, and other fungible items.
    • A financial market or system is a market in which people and entities can trade financial securities, commodities, and other fungible items .
    • Securities include stocks and bonds, and commodities include precious metals or agricultural goods.
    • There are both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded).

  • Uses of Derivatives to Manage Exposure

    • Derivatives allow risk related to the price of underlying assets, such as commodities, to be transferred from one party to another.
    • Companies that produce or depend on the purchase of commodities are exposed to price fluctuations that occur in commodities markets.
    • Derivatives allow risk related to the price of underlying assets, such as commodities, to be transferred from one party to another.
    • Hedging also occurs when an individual or institution buys an asset (such as a commodity, a bond that has coupon payments, a stock that pays dividends, etc.) and sells it using a futures contract.

  • Forms of Money

    • First and oldest payment system is commodity money.
    • Commodity money is government selects one commodity from society to become money, such as gold or silver.
    • Commodity money could be anything.
    • Commodity money could be full-bodied money.
    • Governments discovered a trick about commodity money.

  • Using computers

    • Suppose, for a simple example, we had information about trade-flows of 50 different commodities (e.g. coffee, sugar, tea, copper, bauxite) among the 170 or so nations of the world system in a given year.
    • Here, the 170 nations can be thought of as actors or nodes, and the amount of each commodity exported from each nation to each of the other 169 can be thought of as the strength of a directed tie from the focal nation to the other.

  • Production Possibility Frontier

    • A production-possibility frontier (PPF) graphs the combinations for the production of two commodities with which the same amounts are used.
    • Within a market system, economists use the production possibility frontier (PPF) to graph the combinations of the amounts of two commodities that can be produced using the same amount of each factor of production.
    • As a result, it shows the maximum production level for one commodity for any production level of the other commodity .

  • The Influence of Supply and Demand on Price

    • Consider a certain commodity, such as gasoline.
    • If conditions change and there is a smaller demand for gas, due to the presence of more electric cars for instance, then the price of the commodity decreases.
    • Consider a certain commodity, such as gasoline.
    • If conditions change and there is a smaller demand for gas, due to the presence of more electric cars for instance, then the price of the commodity decreases.
    • Price of other commodities - There are two types: competitive supply (If a producer switches from producing A to producing B, the price of A will fall and hence the supply will fall because it's less profitable to make A), and joint supply (A rise in one product may cause a rise in another.