See the below image for the Goods and services exchange for labor diagram. People use money to pay for goods and services in a market economy. Goods are material items that you can purchase. Anything that you can find in a grocery store, farmer’s market, shopping mall, home improvement shop, or any other store is a good. The prices of goods are largely determined by the supply and demand of an economy.
The decision to exchange money for goods or services is just that: a decision. Every economy reflects a series of choices for consumers, businesses, societies, and governments. Learn more about the consequences of various decisions with these examples of opportunity costs.
Whether you’re purchasing goods or paying someone for a service, both are needed to keep a strong economy running. People use money to pay for goods and services in a market economy. Goods are material items that you can purchase.