BuyFindarrow_forward

Economics of Money, Banking and Fi...

5th Edition
Frederic S. Mishkin
ISBN: 9780134734200

Solutions

Chapter
Section
BuyFindarrow_forward

Economics of Money, Banking and Fi...

5th Edition
Frederic S. Mishkin
ISBN: 9780134734200
To determine

The importance of financial markets in the economy

Concept Introduction:

Financial Market - It is a market where we trade financial instruments. Equity, derivatives, bonds and shares are the examples of instruments used in this market.

Explanation

Financial market plays an important role in the development and growth of the economy. A strong financial market will lead to a robust financial system and thus formalization of economic activities. Financial market is also important because it generates credit in the economy and helps to boost the businesses in terms of funding.

Financial market also helps in maintaining optimal saving-investment relationship. A country needs more investment to be on the path of economic development. This can happen when savings are channelized through productive resources in the form of investment. Financial system also helps in the development of trade. It also helps in fiscal discipline so as to stop inflation and depression from reaching the extreme levels.

Give your grades a boost

Find quality solutions to thousands of textbooks. All for just $2.99 for your first month and only $4.99/month.

Get A's ASAP

Sorry about that. What wasn’t helpful?

Find all the answers to your study problems with bartleby.
Textbook solutions, experts, done. Get me A's ASAP arrow_forward