Activities in financial markets have direct effects on individual wealth, the behavior of business, and the efficiency of the economy.  Three financial markets deserve particular attention: the bond market, the stock market, and the foreign exchange market.  Can you explain how each one of these markets affects people's wealth, business behavior, and efficiency of the economy? Be specific about the relationship between these markets and their impact on the above-mentioned variables.

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter27: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
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Activities in financial markets have direct effects on individual wealth, the behavior of business, and the efficiency of the economy.  Three financial markets deserve particular attention: the bond market, the stock market, and the foreign exchange market.  Can you explain how each one of these markets affects people's wealth, business behavior, and efficiency of the economy? Be specific about the relationship between these markets and their impact on the above-mentioned variables.

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