pcecon.com Class Notes
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There are three markets which we will use later, and to which we can apply the demand and supply model:

The resource market is where resources, most especially labor, are bought and sold. The sellers of resources include workers selling their time to employers. The employers are the buyers in such a market. The price is the wage rate (or salary). Otherwise, it is like the market for anything else...

The market for loans, or loanable funds, is where loans are "purchased." The suppliers in this market are ultimately people who save, although banks act as middlemen (the fancy name is "financial intermediaries"). The demand in this market comes from other people who want to spend money, but have to borrow to do so. The price on each dollar lent and borrowed is the interest rate (in percent, %), and you can also think of it as rent being paid on each dollar...

The market for the currency (money) of other countries is called the "foreign exchange market." People who travel to other countries or import the products of other countries buy the money of those countries to spend there. They are the demanders in this market. The supply of the other country's money comes from people who live there, but who want dollars (for example) so that they can visit or buy things from the United States. The price in this market is called the "exchange rate." In the following diagram, the money being traded is Japanese yen (¥), which is being purchased with U.S. dollars...