Analyze the role financial markets play in creating economic wealth in the U.S. 

Assignment 2: Financial markets and institutions

In the United States, financial markets have a significant role to play in creating economic prosperity. These markets provide capital that businesses need in order to expand/innovate and allow customers to put their money into investments that may generate income. By doing so, these markets create a “virtuous cycle” of growth where companies are able reinvest profits back into research/development—which leads to greater productivity—while also giving investors more options when looking diversify their portfolios.

Financial markets help to keep prices stable because of increased liquidity, which helps prevent any major volatility. This ensures that all income levels are equal and goods can be purchased for affordable prices.

These markets offer a way for people to enter the entrepreneurship market without needing sufficient capital. They can also pool their funds, then take part in the business. If venture succeeds, there may be substantial returns.

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