Question

How does the financial market impact the economy?

A). The financial market helps the economy grow
B). The financial market determines how the economy is doing
C). The financial market gives individuals, companies, and government access to money they need.
D). Both A and C

Answer 1

When financial markets limit access to capital in an economy, it can negatively impact economic growth and employment.

Step-by-step explanation:

In an economy, when the financial markets limit access to capital, it can have a negative impact on economic growth and employment. When individuals, companies, and governments are unable to access the money they need, it becomes difficult for them to invest in new business ventures, expand operations, or create new jobs. This can lead to a slowdown in economic activity and can hinder the overall growth of the economy.

For example, if a country's financial markets restrict access to loans for businesses, those businesses may be unable to invest in new equipment or hire additional employees. As a result, they may not be able to expand their operations or introduce new products and services into the market. This can lead to slower economic growth and fewer job opportunities.

Therefore, it is important for the financial markets to provide individuals, companies, and governments with access to the money they need in order to support economic growth and employment.