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Which of the following statements about the importance of the financial market is TRUE?

A. The financial market is one of the smallest markets in the
global economy.
B. The financial market is one of the most important markets
for economic growth.
C. The financial market is only important to companies and
wealthy people.
D. The financial market doesn't affect the economy.

User Nitz
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1 Answer

3 votes

Answer:

B. The financial market is one of the most important markets for economic growth.

Step-by-step explanation:

One of the positive indicators of economic growth of a country is how sound the financial market is. This means that investors are able to trade seamlessly and have the reward for their investment.

A financial market is a market where securities like shares , stocks, derivatives and bonds are bought and sold. There is an exchange of financial securities and instruments among traders.

The financial market could either be money or capital market. In a money market, the financial instruments or securities traded are on short term while they are long term basis in a secondary market,which are usually more than one year.

One of the importance of a financial market to an economy is that it helps to raise capital by enabling cash transfer from someone who has more to another who has less, thereby facilitating trade investment.

Other factors or indicators of economic growth are natural resources, human capital development, technology, infrastructure etc.

User Syd
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