Production and Trade Assignment Example | Topics and Well Written Essays - 250 words

Production and Trade - Assignment ExampleIt is therefore apparent that an economy that lacks adequate monetary institutions such as in the developing economies suffers from low savings rate, which in turn leads to low investment hence retard economic growth. Financial institutions as well help in reducing poverty traps such as reduction of the information price that may reduce the level of business investment and furthering diminish economic growth. Developing countries experience low economic growth due to lower rate of investment attributed by low savings and high cost of information.Financial institutions are very signifi adviset in economic development especially to people who utilize them well. It can be argued that developing economies experience slow economic growth contributed by lack of proper financial institutions framework and political interference with the financial systems. However, if the rule, regulations and independency of these financial institutions can be a ddressed, they can greatly speed up economic growth in the developing countries. Financial institutions undergo serious challenges in economically pent-up areas since low income earners do not normally save. This therefore inhibits growth of the financial institutions and further minimizes investments hence low economic