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Write two function of capital market?

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Write two function of capital market?
  • 1 answers

Varun Banda 8 years ago

  1. Economic Growth: The capital markets help to accelerate the process of economic growth. It reflects the general condition of the economy. Capital market helps in the proper allocation of resources from the people who have surplus capital to the people who are in need of capital. So, we can say that it helps in the expansion of industry and trade of both public and private sectors leading a balanced economic growth in the country.
  2. Promotes Saving Habits: After the development of capital markets, the taxation system and the banking institutions provide facilities and provisions to the investors to save more. In the absence of capital markets, they might have invested into unproductive assets like land or gold or might have indulged into unnecessary spending.
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