Asked by: Rode Curtido
asked in category: General Last Updated: 5th March, 2020

Why are financial markets important to the health of the economy?

Financial markets help to efficiently direct the flow of savings and investment in the economy in ways that facilitate the accumulation of capital and the production of goods and services. Daily transactions in the financial markets—both the money (short term, a year or less) and capital (over a year) markets—are huge.

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Simply so, why are financial markets important to the economy?

Importance of Financial Markets. Financial markets provide for the efficient allocation of resources within the economy. The financial markets provide businesses and governmental entities access to capital. They also provide employment to many thousands of individuals who work in the financial industry.

Secondly, why is the stock market important to our economy? Stock market is an important part of the economy of a country. In fact the stock market is the primary source for any company to raise funds for business expansions. If a company wants to raise some capital for the business it can issue shares of the company that is basically part ownership of the company.

Secondly, why are financial markets important to the health of the economy quizlet?

Because they channel funds from those who do not have a productive use for them to those who do, thereby resulting in higher economic efficiency.

Why is a stable financial system important to economic growth?

The importance of Financial Stability. It enables the financial intermediation process which facilitates the flow of funds between savers and borrowers, thus ensuring that financial resources are allocated efficiently towards promoting economic growth and development.

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