Question

How does the stock market influence the finances of individuals

Answer 1

Best Answer: The value of a company on the stock market affects the financial stability of a company to some extent. A person working for a company whose value plummets might be out of a job. Conversely, a company whose value rises might higher more people.

The stock market affects the economy to a limited extent. The steep drop in the U.S. stock market in 2001 caused a recession in the U.S.

Answer 2

The stock market has positive and negative influences on people's finances. For example, in a rising stock market, with a good economy, people will tend to spend more money because they feel confident. In a declining stock market, the economy is generally slower, therefore people tend to spend less money. Therefore, the stock market has a big psychological impact on consumers.