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Complexity

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Complexities of the US Financial System

The U.S. financial markets impact the economy, businesses, and individuals in a multitude of ways. Businesses are impacted by the U.S. Financial markets through investing. For instance, if the number of investors lowers dramatically businesses will have a hard time finding funds to grow their business or even start it up at all. Individuals who invest or trade are both positively and negatively impacted. According to Kimberly Amandeo, " The investors profit when the companies increase their earnings, which keeps the U.S. economy growing. Its easy to buy stocks, but takes alot of knowledge to buy stocks in the right company". If not done properly or funds are not pulled before a business fails, the individual- who may have their livelyhood riding on this- could lose everything. The investor is needed in order to keep businesses going. If individuals just decided to stop investing businesses would fail and the U.S. would fall into even more debt. The U.S. Financial market acts as a chain that connects the economy, businesses, and individual together and shows us just how well the economy is doing. If one is effected, both negatively or positively, so are the other two. The US Financial System is not limited to the financial and stock market. A Financial System is a composition of multiple financial institutions, markets, regulatory bodies, and depositors. A Money Market is where low-risk, highly liquid, short-term instruments are created and traded. The main participants of the money market are mostly government, banks and large financial institutions. Currency markets, Forex or foreign-exchange markets, and the mortgage markets will grow or decline according to the health of the economy and the movement of interest rates. Should those economic indicators prove to be positive, then the markets turn upwards and numbers

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