Give 5 examples of the influence of the strong economy on financial markets

The 5 examples are :

i) Inflation - the interest rates are often increased or decreased to keep pace with the business cycle within a limit .

ii) Inflation - During Inflation in order to reduce the purchasing power of investors the interest rate are hiked which reduces the apetite of investors to invest .

iii) Politics - Political news can cause daily spikes in the market i.e supply and demand comes into action . Frightened investors might sell their investments and square off if there is a bad news and more investments if their is some good news .

iv) Foreign Economy - Any news from foreign economy also effects the financial market . Example , dollar prices effects the commodity market .

v) Monetary Policy - Any new monetary Policy implemented in a economy definetly affects the financial market . For e.g Changes in Repo rates .

vi) Budget - The financial market is affected by the new budget laid out by the government .