The basic function of the global economic system is to allocate scarce resources land, labor, management skill, and capital
to their most highly valued use, producing
the goods and services needed by society. The high standard of living most of us enjoy
today depends on the ability of the global economy to turn out each day an enormous
volume of food, shelter, and other essentials of modern living. This is an exceedingly
complex task because scarce resources must be procured in just the right amounts to
provide the raw materials of production and combined at just the right time with labor,
management, and capital to generate the products and services demanded by consumers. In short, any economic system must combine inputs to produce output goods and services. The global economy generates a flow of production in return for a
flow of payments.