How does the stock market create social production or wealth?
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10-12-2012, 08:30 AM
Post: #4
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The market itself does not stimulate the economy. What it does do is provide a one stop shop for people and countries who want to invest money. When that money is invested in U.S. companies, those companies can grow larger, be more innovative and hire more people. A market crash does just the opposite. It creates an unwillingness on the part of investors to risk their money...thus shuts down companies who would otherwise depend on the financial input that a raise in their particular stocks would bring, thus shutting down their ability to be innovative. The more the market drops, the less money is available to companies....and when you combine that with the general population becoming afraid due to the market downturn, spending comes to a halt. That halt in spending then takes away company profit margins and cuts production needs...thus people lose jobs.
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Messages In This Thread |
How does the stock market create social production or wealth? - C.S. - 10-12-2012, 08:22 AM
[] - robot_hooker3 - 10-12-2012, 08:30 AM
[] - Poohcat1 - 10-12-2012 08:30 AM
[] - Phoenix Quill - 10-12-2012, 08:30 AM
[] - Ray Eston Smith Jr - 10-12-2012, 08:30 AM
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