The primary economic role of financial markets is to

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The primary economic role of financial markets is to allocate resources to profitable businesses and away from businesses with losses. Financial markets facilitate the efficient allocation of resources in the economy by directing funds from savers to borrowers. This is done through various financial instruments, such as stocks, bonds, and mutual funds. The goal is to match the supply and demand for funds in order to ensure that the most efficient and productive use is made of available resources. While investors can gain profits and earn dividends, these are secondary effects of the primary role of financial markets. Providing loanable funds to the government is also a secondary role.

The Primary Economic Role of Financial Markets Is to