The major way in which the financial market impacts the economy is that it 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.
The financial market refers to a type of market in which people trade financial securities and derivatives at low transaction costs. Examples of securities include stocks and bonds, raw materials and precious metals, which are known in the financial markets as commodities.
One important effect of the Financial Market is that businesses and investors can go to financial markets to raise money to grow their business and to make more money, respectively.
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