IMPORTANCE OF FINANCE IN ECONOMY
Finance is merely the practical application of economics. The Financial System is
the means by which an economy allocates money to its highest valued use.
Finance is businesses, and governments raise the cash needed to do business. The
goal of any financial system is to make sure that those with good ideas get the
money necessary to implement the ideas.
In a market-based economy, investors invest in a firm and the firm takes the
investment and uses it to implement the business ideas. People do not give
money without the expectation of getting something in return. Incase if money is
given, something is expected back in return. In this case more money. In
competition for more money, firms will strive to find better investments. This
leads to economic growth, more jobs, and hopefully a higher standard of living.