* The prices of stocks play an important role in the economy of any country. If the stock market is in the uptrend then it shows an improving economy.
* If the stock market is in the downtrend then it denotes a declining economy.
* Increased prices of stocks denote a improving business associated with the product.
* Decreasing prices of stocks denote a declining of businesses associated with that product.
* The prices of stocks also play a major role in the wealth of individual households and the overall buying and selling of commodities in the country.
What is a central bank?
The Central Banks watch the behavior and trends in the stock market and they play a vital role in regulating the financial system of any economy. The smooth functioning of the stock market plays a vital role in the economic prosperity of the businesses involved and thereby also the country involved.
The stock markets are traded with a certain degree of financial risk; however, watchful investors feel the risk has returns which are better than investing the money in regular banks, provided watchful stock marketing is practiced.
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