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Complexities of the U.S. Financial System/ Assignment 1

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Complexities of the U.S. Financial System/Assignment 1
Student's Name
Professor's Name
FIN 100: Principles of Finance
December 2014

The U.S. financial markets definitely play a big role in the economy. Unless people invest in businesses, there is no way that they can get started. This is also how they eventually grow in the future in order to meet county's needs and demands. The amount of stocks bought and sold each day directly impact the economy. Prior to the United State's stock market crash in 1929, there was an economic boom. Many Americans had already invested a tremendous amount of money in France. Once the French economy inflated, so did the economy her in the United States. French economy crashed because Americans took their money out of France and put it in U.S. stocks. If that ordeal was to happen today, where all or most of Americans pull their investments, the same economic decrease would happen. Not only would businesses fail, the U.S. would go into even more debt than they already are. The financial market affects all individuals in many ways that we may not even realize. “Many believe that if you don't invest in the stock market, a stock market crash doesn't affect you. However, any average person loses money and opportunities all based off the stock market”.( How does the Stock Market Affect You?, 2011.). When the stock market begins to fall, employers start cutting back on employee benefits. These benefits can include health insurance and retirement plans. Another area where individuals are affected is n the housing market. A bad economy can make it extremely hard for individuals to sell their homes. If a homeowner cannot pay the difference between the price of the home and the amount that they currently owe the bank, the home cannot be sold. These sums are generally over $10,000.00. Purchasing a home also gets very

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