Question

Explain the Role of financial system in economic development

Answer 1

Answer:

Relationship between financial system and economic development

The development of any country depends on the economic growth the country achieves over a period of time. Economic growth deals about investment and production and also the extent of Gross Domestic Product in a country. Only when this grows, the people will experience growth in the form of improved standard of living, namely economic development.

Answer 2

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Economic development needs balanced growth which can be attained by propelling growth in all sectors, simultaneously. The financial system helps allocate savings into investment channels. It helps in mobilizing savings and make better use of these funds by allowing investments in various sectors of the economy.

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