The Stock Market and the Economy Summary

ANSWER

The Stock Market and the Economy Summary

The financial market be it in the U.S. or in the global economy plays an integral role in facilitate money flow. The financial market contains of a fundamental part of the free market economic system where people and other entities have the capacity and made to trade commodities, securities, among other goods. This is done by regulating the cost of transactions to the minimum based on the trends of demand and supply in the market. The economic summary paper examines four of the main financial markets in the U.S. including New York Stock Exchange (NYSE), NASDAQ, American Stock Exchange Equities Options ETFs (AMEX), and BATS Global Markets.

By market capitalization, NYSE is the U.S. and world’s largest stock exchange market followed by NASDAQ. AMEX competes as the third in terms of trading volume in the U.S. In listing of companies, BATS has developed to be a major force in the American economic performance (Wagner, 2020).

In overall, the aforementioned financial markets play an integral role in the performance of the U.S. and global economy. The operations of stock exchange market allow buyers and sellers to conduct their transactions effectively at a low cost. This allows   companies, businesses, organizations, and governments to woe and attract investors that commit their funds in the companies. Sold in terms of shares and currency exchange rates, stock markets exchange provides an opportunity to produce a wide pool of money flow fundamental to the economy. The functions of the financial markets influence the economy by regulating the flow of capital and investments (Wagner, 2020). This causes a positive impact on the economy. When the performance of company shares drops, the stock market cautions investors by informing them of the risks involved in the trades. This is fundamental to ensure sound decisions are made in regulating the performance of the economy. It is essential to note that financial markets provide consistent flow of money which vital to the sustainable of the economy. Therefore, this asserts that U.S. and global economy operates efficiently in the wake of functions of the financial markets to maintain a steady flow of currency between buyers and sellers.

References

Wagner, A. F. (2020). What the stock market tells us about the post-COVID-19 world. Nature Human Behaviour, 4(5), 440-440.