Question

why is the stock exchange called a barometer of the economic and business conditions in a country?​

Answer 1

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Barometers are data points that indicate trends in the market. It is quite common for a stock index or exchange to be used as a barometer for the national economy.

The different types of barometer are

i)Economic barometer

ii) Market Barometer

iii) Consumer - Level Barometers.  

      The stock exchange is not only used as a platform to carry business transactions but as the barometers that help in indicating the general conditions of the business atmosphere. One can measure the economic and business requirements with the help of stock exchanges as they provide factual and accurate information about the companies.