Question

Explain how financial market mobilizes money and wealth creation opportunity within a country.

Answer 1

Answer) The financial system accelerates the rate and volume of savings through the provision of various financial instruments and efficient mobilization of savings. It aids in increasing the national output of the country by providing the funds to the corporate customers to expand their respective businesses. The financial system of a country is an important tool for the economic development of the country. It helps in the creation of wealth by linking the savings with investments. It also facilitates the flow of funds from the households (savers) to business firms (inventors) to aid in wealth creation and development of both the parties. Not only that, but the financial system of a country is also concerned with the allocation of savings, provision of funds, facilitating the financial transactions, developing the financial markets, provision of legal financial framework, and provision of financial and advisory services in the country. A financial system comprises of financial institutions, financial services, financial markets, and financial instruments.