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Gains from Having a Stock Exchange in a Country

Question

Explain the benefits a country can gain from having a stock exchange.

Category:

Macroeconomic Factors and Policies

Frequently asked question

Preview Answer

I. 🍃Introduction
- Definition of financial markets
- Importance of financial markets in the economy

II. Input
- Market for the sale of shares and bonds
- Encourages saving and investment
- Facilitates mergers and acquisitions
- Source of finance for firms

III. Output
- Enables firms to grow
- Government funding through bonds
- Attracts MNCs to set up in the country
- Creation of other financial institutions

IV. Advantages of financial markets
- Increased economic growth
- Increased employment opportunities
- Increased exports

V. Disadvantages of financial markets
- Risk of market failure
- Unequal distribution of wealth

VI. 👉Conclusion
- Recap of the importance of financial markets in the economy
- Future prospects of financial markets.

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