U.S. Financial System

U.S. Financial System

Q1.

The simple answer is that strong operating financial markets play a major role in contributing to the efficiency and health of an economy. There is a great relationship between economic growth and financial market development (Econ 2005). According to some researchers and professionals, there is a casual relationship between industry level, firm level and cross country studies. This relationship indicates that the level of financial development on a large scale and have a positive impact on the economic growth.

Financial markets helps to accumulate the capital and the production of services and goods, and direct the flow of investment and savings efficiently. The combination of financial institution and financial markets, and the collection of financial instrument and products, suits the need of issuers and receivers, and therefore the overall economy of a country (Econ 2005).

Subsidiaries of United States are linked with 21 million jobs, $2.0 trillion of U.S. GDP, and $1.2 trillion in compensation, which measures capital income and labour in the U.S. (PWC 2012). However, U.S. economy directly and indirectly associated with the subsidiaries of U.S. and also responsible for 14% of total compensation, 12.2% of employment and 14.2% of value added (PWC 2012).

Loosing a job creates obvious problems for both individual and families. The loss of income can persist for a long time, infect after a new job is taken at a lower salary (Irons 2009).When there is an increase on economic growth or inflation, there is a decrease in unemployment and the result, companies are in need of more employees, and it becomes hard to select necessary workers. When the sales and demands increases, unemployment decreases and production goes up (Infotechusa, 2009).

Q2.

The creation of Federal reserves was held on December 23, 1913, on the sign of President Wilson, making ...