Please explain what role the Financial Markets play in the economy.

The financial system comprises all financial markets, instruments and institutions. Today I would like to address the issue of whether the design of the financial system matters for economic growth. My view is that the answer to this question is yes. According to cross-country comparisons, individual country studies as well as industry and firm level analyses, a positive link exists between the sophistication of the financial system and economic growth. While some gaps remain, I would say that the financial system is vitally linked to economic performance. Nevertheless, economists still hold conflicting views regarding the underlying mechanisms that explain the positive relation between the degree of development of the financial system and economic development.

Explanation:

answer

explanation

the given equation is

we can rewrite this as:

let

then the equation becomes:

the factors of 8 that sum up to -9 are {-1,-8}

we split the middle term with these factors to obtain,

we factor by grouping to obtain:

apply the zero product property to get:

but