The stock market is a key driver of economic growth from "summary" of How Finance Works by Mihir Desai
The stock market plays a crucial role in driving economic growth. When companies need to raise capital to fund their operations or expand their businesses, they often turn to the stock market. By selling shares of their company to investors, firms can raise the funds they need to invest in new projects, hire more employees, and boost production. Investors who buy shares in these companies are essentially providing them with the capital they need to grow. In return, they hope to earn a return on their investment in the form of dividends or capital gains. This process of capital formation is essential for economic growth, as it allows businesses to invest in new technologies, expand into new mar...
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