The importance of financial markets in the economy

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Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 1, Problem 1LO

To determine

The importance of financial markets in the economy

Expert Solution & Answer

Explanation of Solution

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.

Economics Concept Introduction

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.

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Students have asked these similar questions

1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically. 2. Consider the following table of long-run total costs for three different firms: Quantity Total Cost ($) Firm A Firm B Firm C 1 60 11 21 2 70 24 34 3 80 39 49 4 90 56 66 5 100 75 85 6 110 96 106 7 120 119 129 Does each of these firms experience economies of scale or diseconomies of scale? Explain your answer with necessary calculations.

Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer.State the condition for a consumer's utility maximizing choice and illustrate graphically.

1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically.

Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 1, Problem 1LO

To determine

The importance of financial markets in the economy

Expert Solution & Answer

Explanation of Solution

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.

Economics Concept Introduction

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 1, Problem 1LO

To determine

The importance of financial markets in the economy

Expert Solution & Answer

Explanation of Solution

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.

Economics Concept Introduction

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 1, Problem 1LO

To determine

The importance of financial markets in the economy

Expert Solution & Answer

Explanation of Solution

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.

Economics Concept Introduction

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 1, Problem 1LO

To determine

The importance of financial markets in the economy

Expert Solution & Answer

Explanation of Solution

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.

Economics Concept Introduction

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.

Answer 6

Chapter 1, Problem 1LO

To determine

The importance of financial markets in the economy

Expert Solution & Answer

Explanation of Solution

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.

Economics Concept Introduction

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.

Answer 7

Chapter 1, Problem 1LO

To determine

The importance of financial markets in the economy

Answer 8

Expert Solution & Answer

Explanation of Solution

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.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

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.

Answer 12

Ch. 1 - Prob. 1LO Ch. 1 - Prob. 2LO Ch. 1 - Prob. 3LO Ch. 1 - Prob. 4LO Ch. 1 - Prob. 5LO Ch. 1 - Prob. 6LO Ch. 1 - Prob. 1Q Ch. 1 - Prob. 2Q Ch. 1 - Prob. 3Q Ch. 1 - Prob. 4Q

The importance of financial markets in the economy

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The importance of financial markets in the economy

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